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The dollar's recovery took a breather on Friday as investors waited for monthly data on US jobs and assessed the impact of a two-day global government bond sell-off that pushed US Treasury yields to their highest levels. high level in seven years.
The 10-year US benchmark yield reached its highest level since May 2011 after private sector payroll data was stronger than expected.
Private sector payroll figures were seen as reinforcing the likelihood that US employment data for September will also be stronger than expected, likely indicating that the Federal Reserve tightening cycle will continue.
"The obvious catalyst for the evolution of the US dollar has been the increase in US Treasury yields," said Shusuke Yamada, currency and equity strategist at Bank of America Merrill Lynch in Tokyo.
Yamada said the dollar / yen could test level 115 if US employment data turns out to be strong, especially with respect to wage growth.
"Few people expect the dollar / yen to be significantly above 115. That would be interesting once the pair breaks that figure, and I think the positioning is still pretty light," he said. he declared.
The dollar was virtually unchanged at 113.93 yen on Friday, after peaking at 11.4 months at 114.55 yen in the previous session.
An increase above 114.735 would bring the greenback to its highest level since mid-March 2017.
The surge in US yields reduced the gap between the 10-year US and Japan benchmark rates to 304.49 basis points, reaching a record high of 304.90 basis points in the mid-1990s. May this year.
The Reuters report has helped the yen overnight that the Bank of Japan is tolerating further increases in very long yields as long as this increase will not push yields to 10 years well above their level. goal of zero percent.
US 10-year Treasury yields were the last at 3.1949%, while the benchmark 10-year JGB returns were 0.150%, close to their highest level since January 2016.
The dollar index was up 0.1% on the day at 95.833.
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