USD/JPY Below 101.50 Amid Risk Aversion

Japan’s currency was near a two-month high versus the dollar as fighting in Ukraine and anti-China violence in Vietnam prompted demand for safety.

The yen held a three-day gain as the yield premium 10-year U.S. Treasuries offer over similar-maturity Japanese government bonds was near a seven-month low. Federal Reserve Chair Janet Yellen speaks this week and a Labor Department report on May 22 is forecast to show the number of Americans applying for jobless benefits increased. The euro traded near more-than-two-month lows versus the yen and the greenback as speculators turned bearish on the 18-nation currency.

“Demand for U.S. Treasuries will continue to be supported by risk aversion, limiting the upside in dollar-yen,” said Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services. “There is uncertainty surrounding presidential elections in Ukraine and rising tensions between China and Vietnam. It’s not an environment where investors want to aggressively take risks.”


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