The yen snapped a two-day losing streak against the dollar in Asian trading on Tuesday after a 20-year Japanese government bond auction drew record demand. Political unrest in France and Italy continued to test traders, while the euro and pound gained.
The yen snapped a two-day losing streak against the dollar in Asian trading on Tuesday, after an auction of long-dated Japanese government bonds drew record demand. Growing political risk in Europe continued to test traders' nerves.
Bond auction draws record bids
The 20-year auction received bids worth 5.84 times the amount sold, beating the 4.01 times at the previous auction last month. The result lifted the yen 0.2% to 158.15 per dollar.
The yield on the 20-year bond fell 6 basis points to 3.71% after the sale. Masahiko Loo, senior fixed-income strategist at State Street Investment Management in Tokyo, said: "The record 20-year auction is a strong signal that sidelined cash is finally coming back".
Europe's turmoil shapes the mood
Loo added that JGBs are also starting to look like a relative haven from Europe's political and fiscal volatility, particularly around France. In France, authorities set curfews in several cities on Monday to curb nationwide anti-government protests. In Italy, the government said it would dispatch 500 troops after two days of unrest.
Even so, the euro rallied 0.2% to $1.1234. Chris Weston, head of research at Pepperstone Group in Melbourne, said in a note that the euro's resilience suggests traders aren't yet treating French sovereign risk as a systemic European problem.
Other currencies edge higher
The British pound rose 0.4% to $1.3351. The US dollar index was down 0.2% at 101.77, near the lower end of the range it has held throughout the month.
Source: Investing.com (Reuters)
Trading involves risk.
Risk Disclaimer
