NEW YORK (CNN/Money) -
The U.S. dollar fell almost half a percent against the yen Monday after a newspaper report said Japan had ended its policy of intervening in the foreign exchange market to weaken its currency, a move that bolstered the yen.
Japanese Ministry of Finance officials denied the report in the Times in London, which was based on a Bank of Japan (BOJ) source, that they would no longer seek to weaken the yen, and said their currency policy was unchanged.
The report initially sent the yen to six-week highs against the dollar before the Ministry of Finance reminded markets that it, and not the BOJ, controlled foreign exchange policy and that it would continue intervening as needed.
"We are still focused mainly on the potential that the Bank of Japan has decided to officially end its intervention. This is helping to boost the yen," said Mike Malpede, senior foreign exchange analyst at Refco Group Ltd.
In late trading Monday, the dollar bought ¥105.50, down from ¥106.17 late last week, and the euro bought $1.2152, up slightly from $1.2142 late Friday.
The dollar dropped below ¥105.30 in early Tokyo trading, its lowest level since mid-February when it fell to a three-year low of ¥105.16 before rebounding on intervention.
In the bond market, Treasury prices fell for a fourth straight session as investors worried that a week packed with economic data, culminating in the March jobs report, could spell trouble for bonds.
Due out Friday, the Labor Department's payrolls report is expected to show that firms are finally starting to take on new workers, albeit slowly, after a prolonged hiring drought. Few doubt that such an outcome would bring the recent rally in bonds to a screeching halt.
At 3:30 p.m. ET, the benchmark 10-year note fell 13/32 of a point to 100-29/32 to yield 3.89 percent, up from 3.83 percent late Friday, and the 30-year bond shed 23/32 to 108-15/32 to yield 4.81 percent, up from 4.76 percent late last week.
The two-year note dropped 2/32 to 99-25/32 to yield 1.62 percent and the five-year fell 8/32 of a point to 99 even, with a yield of 2.84 percent.
For the Treasury market, which thrives when the economy is weak, signs of employment growth would be viewed as giving the Federal Reserve leeway to begin raising interest rates.
"People are getting defensive, setting up for payrolls," Gerald Lucas, chief Treasury strategist at Banc of America Securities, told Reuters. "We live from payroll to payroll, and the market fiddles around in between."
-- Reuters contributed to the story
|
