Por Saikat Chatterjee
LONDON, Oct 12 (Reuters) – The yen traded near a three-year lows against the dollar on Tuesday as a surge in U.S. Treasury yields and soaring prices of commodities, particularly oil , led investors to ditch the currency.
* In London trading, the dollar held at 113.28 yen after briefly touching 113.50 in Asian trading, its highest level since December 2018.
* The weakness of the Japanese currency, which fell 4% against the dollar in three weeks, comes as world bond yields have risen due to inflationary concerns. The return of the US 10-year Treasury bond exceeded 1.60% for the first time since the end of May.
* Japan’s new Prime Minister Fumio Kishida said at the weekend that he will not seek to change the country’s taxes on capital gains and dividends, which has spooked investors and raised concerns about market exits of values.
* Rising US yields forced investors to ditch the yen against the dollar, prompting the second-largest daily decline in the value of the Japanese currency on Monday.
* But except for the yen, there was high demand for safe-haven currencies as global indicators of market sentiment showed warning signs.
* The ZEW indicator of economic confidence in Germany fell for a fifth month, the latest in a series of indicators showing supply bottlenecks holding back the recovery in Europe’s largest economy.
* The dollar index was at 94.30, not far from a one-year high of 94.504 hit in late September, as traders positioned themselves for the Federal Reserve to announce a reduction in its bond buying program in November.
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