TOKYO- The yen traded near an almost three-month low to the dollar and reached a two-week trough versus the euro on Tuesday, as rising bond yields in the US and Europe lured Japanese investors.
The yen was little changed at 110.985 per dollar, not far from Monday’s low of 111.07, a level not seen since July 5.
It was also largely flat at 129.785 to the single currency after earlier touching 129.92 for the first time since Sept. 14.
While benchmark 10-year Japanese government bond yields remain pinned near zero by the Bank of Japan’s yield curve control policy, equivalent US Treasury yields have soared to a three-month high, touching 1.516 percent overnight.
In Asian trade, the dollar was up nearly 0.1 percent in line with its performance in the international session Monday after it rose alongside bond yields.
Rising bond yields prompted a shift from growth to cyclical stocks in the United States, in a move that analysts expect could become more permanent after a prolonged period of supressed bond yields.
US Treasury yields soared to a three-month high, touching 1.516 percent overnight following the Federal Reserve’s move last week to indicate fiscal stimulus could be tapered as early as November.
