Yen gains broadly on latest bout of Korean tensions
The yen gained against the dollar and other peers on Wednesday on the latest bout of geopolitical tensions stemming from the Korean Peninsula.
North Korea said on Wednesday it is "carefully examining" plans for a missile strike on the U.S. Pacific territory of Guam, just hours after U.S. President Donald Trump told the North that any threat to the United States would be met with "fire and fury".
The dollar weakened against the yen, which is often sought in times of geopolitical tension. The U.S. currency was down 0.4 percent at 109.865 yen
The South Korean won
"The market had been complacent for a while regarding headlines from North Korea. So it reacted when the North threatened Guam," said Mitsuo Imaizumi, chief FX strategist at Daiwa Securities.
"Few participants, however, think that North Korea would actually strike Guam at this juncture. So the impact is likely to fade eventually."
Risk sentiment soured in the financial markets to drive U.S. Treasury yields down and in turn weigh on the dollar.
With Asian bourses and U.S. stock futures weakening early on Wednesday, the safe-haven 10-year Treasury yield (US10YT=RR) was last down 3 basis points.
The euro edged down 0.1 percent to $1.1735
Elsewhere, the retreat by the New Zealand dollar continued, with the kiwi hovering near a three-week low of $0.7319
The kiwi has been on the back foot all week ahead of the Reserve Bank of New Zealand's (RBNZ) policy decision due on Thursday, when it is widely expected to keep interest rates unchanged at a record low 1.75 percent.
Despite its recent weakening, the New Zealand dollar is still up more than 5 percent this year, setting a 26-month high of $0.7557 in July. Concerns are that the RBNZ will attempt to jawbone the currency and turn more dovish, reinforcing the need for low rates.
The Australian dollar, sensitive to shifts in risk sentiment, was down 0.5 percent at $0.7876
(This version of the story corrects erroneous dollar/yen level in third paragraph)