Yen strengthens as dollar, Treasury yields retreat
The Japanese yen trades near 158 per dollar after gaining nearly 1% in the previous session, as the dollar falls and Treasury yields ease following expanded US bond buyback operations.
The Japanese yen traded near 158 per dollar on Thursday after gaining nearly 1% in the previous session, supported by a sharp decline in the dollar and retreating Treasury yields as the US government moved to contain long-term borrowing costs by expanding its bond buyback program.
The US Treasury Department said it would at least double the size of liquidity-support buyback operations covering securities with maturities from 10 to 30 years, as the recent surge in yields heightened concerns over market liquidity and stability.
Still, the yen remained under pressure over the longer term due to wide interest rate differentials, mounting fiscal concerns and elevated energy and import costs.
Latest data also showed Japan’s trade deficit widened sharply in July as imports surged to a record high on increased crude oil purchases, while export growth remained robust, supported by strong demand for AI-related chips.