USD/JPY falls to a one-week low after US Treasury buybacks push long-term yields down by up to 10 basis points.
The Japanese Yen strengthened against the US Dollar on Wednesday, with USD/JPY dropping to 158.47, its lowest level in over a week. The decline follows a sharp fall in longer-term US Treasury yields after the Treasury Department announced increased buybacks of longer-dated government debt.
The Treasury will raise the maximum size of each buyback operation from $2 billion to at least $4 billion for 10-to-20-year and 20-to-30-year maturities, starting September 9. The 10-year yield fell by more than 5 basis points to 4.64%, while the 30-year yield dropped nearly 10 basis points to 5.18%. The US Dollar Index (DXY) declined 0.72% to 98.94, its lowest since May 29.
Lower yields reduced the appeal of Dollar-denominated assets, pressuring the Greenback broadly. Markets also remain focused on the Federal Reserve’s policy outlook, with recent US data easing rate hike expectations, though energy-driven inflation concerns persist.