USD/JPY Drops Below 118 on Sagging U.S. Treasury Yields

The dollar got off on the backfoot against the yen on Tuesday, as Treasury yields fell on increased demand for safe-haven assets amid plunging oil prices and weaker stock markets.

The dollar edged down about 0.1 percent against the yen to 118.26, moving back toward a one-week low of 118.10 yen touched overnight, as markets in Tokyo reopened after Monday’s public holiday.

“Buying USD/JPY is once again one of the market’s favorite global macro trades for 2015 with some optimistic analysts calling for a move to 145 but as the currency pair consolidates and heads for a break of 118, many traders are wondering if USD/JPY will fake everyone out again,” said Kathy Lien, managing director at BK Asset Management in New York, in a note to clients.


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