The yen's weakening trend continued in the London market. After rising to the lower ¥158 range, dollar-yen underwent a temporary correction amid caution over intervention. Yen selling again gained the upper hand against the backdrop of the U.S.-Japan interest rate differential, and most cross-yen pairs also remained at weaker-yen levels.
Although the London market fluctuated nervously at weaker-yen levels, the underlying trend of yen selling continued quietly. Dollar-yen was bought from the upper ¥157 range in the early Tokyo session to the mid-¥158 range in early London trading, but was then temporarily pushed back to around ¥158.00 amid caution over intervention.
Euro-dollar traded in the lower 1.12 range and remained range-bound after buying led the move in the Tokyo market. The rise in the U.S. 10-year Treasury yield has revived dollar-buying pressure and led to a renewed reassessment of the dollar.
The yen's weakness spread to cross-yen pairs. Euro-yen rose to the mid-¥177 range and pound-yen to the mid-¥209 range, while the yen's weaker level against the previous day was maintained. The dollar regained stability as London trading progressed, but the market remained sensitive to higher oil prices and developments in European government bonds.
Overall, the market continued trading at weaker-yen levels while focusing on the impact of the U.S.-Japan interest rate differential. In addition to interest rate movements, European equities and U.S. stock futures remained firm, and risk aversion continued to recede.