US Treasury's Bond Buyback Boosts US Dollar, Slows Yen Gains
The Japanese Yen paused its advance on Wednesday as the US Treasury's announcement of a larger bond buyback supported the US Dollar. The USD/JPY pair traded around 153.50, its lowest level since February, after briefly falling below 153.00. The US Treasury said it could buy back up to $6 billion of longer-dated debt on Thursday, above the previously indicated minimum of $4 billion per operation.
US Treasury yields moved higher following the announcement, with the benchmark 10-year yield rising to around 4.85%, its highest level since November 2023. The US Dollar Index (DXY) traded around 98.80 after recovering from 98.60, its lowest level since August 21.
Strategists at Scotiabank highlighted that the risk for the JPY remains firmly tilted to the upside as market participants reassess sentiment and positioning. They noted that recent price action leans towards support around 153 for USDJPY, with resistance expected at 155.