Market News
Dollar gains, yen slips as Japanese yields tumble - REUTERS
Summary
- Yen weakens as Japanese bond yields slump
- Dollar extends gains as consumer confidence improves
- US Senate debates tax-cut bill impacting debt
NEW YORK, May 27 (Reuters) - The dollar strengthened on Tuesday as the yen came under pressure from a sharp fall in Japan's long-dated bond yields, while the greenback was boosted by data showed improving U.S. consumer confidence.
“It's very much being driven by global bond markets, and most recently what we've seen in Japan,” said Eric Theoret, FX strategist at Scotiabank in Toronto. “Market participants are reading into the fact that the Ministry of Finance sent out a questionnaire to their primary dealers about issuance.”
Bloomberg reported on Tuesday that the Ministry of Finance sent a questionnaire to market participants regarding issuance and current market issues. Japan will consider trimming issuance of super-long bonds in the wake of recent sharp rises in yields for the notes, two sources told Reuters on Tuesday.
The plan comes amid a recent spike in super-long bond yields to record levels due to dwindling demand from traditional buyers such as life insurers and global market jitters over steadily rising debt levels.
