The yen recouped some losses against the U.S. dollar on Tuesday, after the safe currency took a drubbing on news of the development of a coronavirus vaccine which raised optimism of a global economic recovery.
U.S. drugmaker Pfizer Inc and German partner BioNTech SE said a largescale clinical trial showed their vaccine was more than 90 effective in preventing COVID19.
While a jump in longerdated U.S. Treasury yields helped push the yen to its biggest loss overnight since March, analysts said the currency pared losses as some traders took profit on the dollar.
In afternoon Asian trade, the yen firmed to 104.97 against the dollar.
Against the Australian dollar, the yen fetched 76.43, having lost more than 2 overnight.
Whats important about the overnight movement is that it overturned the current trend of the U.S. dollar falling, instead of the yen, when the market turns riskon, said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
The yuan and euro have been rising against the dollar as equities jumped on Joe Bidens election win… But the overnight movement flipped things back to the way it is when markets usually turn riskon U.S. Treasury yields rise and the yen depreciates more than the dollar.
The vaccine news comes as the global tally of COVID19 infections reached 50.68 million on Monday, stoking worries of more lockdown measures across the globe.
But markets got a bit overexcited following the vaccine news considering the trial results are…