Yen hits 40-year low

The dollar rose to a new high of 162.84 yen in the Asian session

The dollar climbed after a sharp rise in Treasury yields and ​pushed the yen to a 40-year low on Wednesday, as traders braced for a crucial U.S. jobs ‌report and ramped up bets on an imminent central bank rate hike.

The dollar rose to a new high of 162.84 yen in the Asian session, well above levels that prompted Japanese authorities to intervene a few months ago to shore up the currency. It was last at 162.67 yen.

We believe we ​are close to potential action, said Chidu Narayanan, head of macro strategy for APAC at Wells Fargo, referring to ​the likelihood of another intervention.

We are at crucial levels, not necessarily in terms of a target ⁠spot level, but levels where the (Ministry of Finance) might need to intervene to retain its credibility, Narayanan said.

In the broader market, the dollar was on the front foot, as it rode an overnight jump in U.S. Treasury yields.

The euro dropped 0.11% to $1.1408. Against a range of currencies, the dollar steadied at 101.34.

The rise in the dollar came on the heels of ​a 9-basis-point intraday rise in the 10-year U.S. Treasury yield on Tuesday, before it closed the session some 4.8 bps higher.

The ​2-year yield was up 3 bps in the previous session and last stood at 4.1785%.

Analysts said there was no clear catalyst behind the moves, ‌though they ⁠could have partially been driven by some month-end positioning.

All the evidence and the Fed’s view itself is that the labour market is proving to be resilient, and therefore in terms of the Fed’s dual mandate, the labour ​market is clearly not giving any ​signal that they should ⁠be thinking about cutting rates, said Ray Attrill, head of FX strategy at National Australia Bank (NAB).