Dollar rides surge in Treasury yields, yen treads near key 150 level

SINGAPORE, Oct 20 (Reuters) – The dollar outperformed major peers on Thursday as US Treasury yields hit a multi-year high, while the yen fell to a fresh 32-year low and markets were on high alert for signs an intervention.

Searing inflation data from the UK, Canada and New Zealand this week also showed central banks around the world are far from taming decades of inflation, even at the cost of stifling growth, stoking recession fears and stimulating demand for fuel the dollar as a safe haven.

Against the rising greenback, the yen again broke a fresh 32-year low. The pound, euro and antipodes currencies also suffered losses in early Asian trade.

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The US dollar index rose 0.05% to 113.04 after rising nearly 1% overnight.

The benchmark 10-year US Treasury yield rose to 4.148%, its highest level since mid-2008, while two-year Treasury yields hit a 15-year high of 4.58%.

“You still can’t write off the US dollar, I’m still not convinced that we’ve necessarily seen the tops for this cycle,” said Ray Attrill, head of FX strategy at National Australia Bank (NAB).

The Japanese yen hit a new low of 149.96 per dollar and last bought at 149.95.

The fragile yen has been on a losing streak for 11 consecutive sessions since the close on Wednesday, and has hit 32-year lows again in the past six sessions.

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“Looks like it’s the rabbit in the spotlight right now,” NAB’s Attrill said.

“With government bond yields up well over 4%, I think the dollar/yen would already be trading north of 150 were it not for the threat of intervention.”

Last month, Japan intervened in the foreign exchange market to buy yen for the first time since 1998 to prop up the troubled currency.

Elsewhere, sterling fell 0.2% to $1.12005, although data released on Wednesday showed the biggest rise in food prices since 1980 pushed UK inflation back into double digits last month.

Inflation figures continue a turbulent week for the pound after Jeremy Hunt scrapped Prime Minister Liz Truss’ economic plan earlier this week and scaled back her huge energy subsidy.

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The euro fell 0.1% to $0.9762.

The Aussie fell 0.2% to $0.6258, while the Kiwi fell 0.36% to $0.5656.

Data on Thursday showed Australia’s unemployment rate hovered near a five-decade low at 3.5% in September, although there was a possible sign of an easing of a very tight job market as employment rose much less than expected.

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Reporting by Rae Wee; Adaptation by Stephen Coates

Our standards: The Thomson Reuters Trust Principles.

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