LONDON/NEW YORK, April 20 (Reuters) – The Japanese yen recovered from a fresh two-decade low on Wednesday after the Bank of Japan stepped into the market again to defend its ultra-low interest-rate policy, drawing a sharp contrast with the United States where the Federal Reserve is on an aggressive tightening path.
Traders said the dollar’s fall against the yen also coincided with a slide in U.S. Treasury yields. After hitting three-year peaks earlier in the session just off the 3% mark, benchmark 10-year yields eased 4 basis points to 2.8744% .
“Everybody was going into Asian trading the last few days to see if the BOJ will actually intervene instead of just saying something,” said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull in Toronto.
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“But we didn’t really get much of that and we just got more doubling down on the BOJ’s yield curve…