Investors have been selling the yen, anticipating a big gain for the Nikkei.
The yen was lower against its rival currencies in Asian trade Tuesday, with improved market sentiment prompting sales of the safe-haven Japanese currency.
The U.S. dollar USDJPY, +0.25% advanced to as high as ¥109.23 before trimming its gains to ¥109.06. That compared with ¥108.78 late Monday in New York.
“We are seeing (the dollar’s) upside is weighed down, as investors lock in profits or sell on recovery,” said Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow. “That’s capping the dollar’s upside, despite the stock market’s steep gain,” he said.
Saudi Arabia is threatening to sell $750 billion in U.S. assets.
The latest shudder in the long-running international drama known as U.S.-Saudi Arabian relations occurred late last week, with a report that the Saudi government had threatened economic retaliation over a bill in Congress that could make it liable for damages from the 9/11 attacks.
Specifically, the report in the New York Times said the Saudis had said they might sell "up to $750 billion in treasury securities and other assets in the United States" if the bill passes.
The report sparked instantaneous hand-wringing and blustering across the social media fever-scape. A sudden sale of $750 billion in Treasury securities, it was said, could crater the bond market, leading to price declines of 50%-60%. The Saudis were out of line in interfering with the U.S. legislative process, it was said. And aren't they just trying to hide their complicity in the attacks.
Crude oil prices rose
Crude oil prices rose early Tuesday, as the strike by oil workers in Kuwait and outages in other parts of the world have renewed hope of a smaller global glut.
The strike could potentially result in output falling to 1 million barrels a day, the research firm said. Kuwait produced 2.7 million barrels a day in March, based on data provided by the Organization of the Petroleum Exporting Countries.
Prices fell almost 7% on Monday after a deal that would have limited future crude production between major Organization of the Petroleum Exporting Countries and non-OPEC countries was thwarted at the last minute on Sunday upon Saudi Arabia’s blatant refusal to join the pact without Iran’s commitment to do the same.
Reference: MarketWatch, Los Angeles Times
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