Dollar Drops to Two-Week Low Versus Yen as Treasury Yields Fall

• Dollar Drops to Two-Week Low Versus Yen as Treasury Yields Fall

The dollar dropped to a two-week low against the yen as traders pushed it through stops in thin trading amid a slide in Treasury yields.

The greenback weakened against all its major peers Thursday, with leveraged funds shorting the dollar against the yen as the currency pair continued a pull back from a 10-month high. Bloomberg’s dollar gauge posted a sharp retreat from gains earlier this week, after a strong five-year Treasury note auction Wednesday sent yields lower, sapping demand for the U.S. currency.

“On the rise we didn’t see any strong resistance, so it will be the same on the fall,” said Simon Pianfetti, a senior manager at the market solutions department at SMBC Trust Bank Ltd. in Tokyo. Stop-hunt below 116.55, the low set on Dec. 19, he said, adding that the next cluster of support lies at 115-115.25 yen.

The dollar has climbed about 11 percent against the yen since the U.S. election of Nov. 8 that swept Donald Trump to the presidency, the most among Group of 10 peers. The rally may be over-extended given that the S&P 500 Index and Treasury yields showed signs of topping out in mid-December when the Federal Reserve raised benchmark rates.

“Almost nobody believes Trump can implement everything he’s promised to do,” said Satoshi Okagawa, senior global market analyst at Sumitomo Mitsui Banking Corp. in Singapore. “At some point, Treasury markets will come to realize that, and yields will decline.”

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• EUR/USD rises 0.4% to 1.0453
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