By Kevin Buckland
TOKYO, March 20 (Reuters) - Safe-haven currencies the
yen and U.S. dollar recovered from early steep declines and the
risk-sensitive Australian and New Zealand dollars flipped to
losses as early optimism ebbed over efforts by global
authorities to contain a banking crisis.
Japan's currency, which is particularly sensitive to
long-term Treasury yields, rebounded from losses as steep as
0.6% to last be flat against the dollar as the U.S. 10-year
yield pared an early decline in Tokyo trading and headed back
toward a nearly two-month low.
The Aussie, which at one point had been up by 0.7% to a
nearly two-week top of $0.6743, was last 0.2% lower at $0.6683,
sliding back below the closely watched $0.67 mark. New Zealand's
kiwi was 0.3% lower at $0.6250, giving up an earlier gain of as
much as 0.7%.
Over the weekend, the Federal Reserve, European Central
Bank, Bank of England, Swiss National Bank, Bank of Canada and
Bank of Japan announced joint action to enhance market
liquidity. That followed Swiss authorities' negotiation of a
buyout of Credit Suisse by UBS , but at a huge
discount and with a $17 billion debt writedown.
A Fed rate decision on Wednesday adds an additional layer of
uncertainty. Traders are still of the view that a quarter point
rise is likely but are now positioned for a peak in rates in May
at around 4.8%, and then 76 basis points of declines until the
end of the year. "The market's driving force is risk aversion," said Takahiro
Sekido, chief Japan strategist at MUFG.
"At least within this week, I expect the yen will stay
strong overall."
The yen last traded at 131.79 per dollar , keeping
intact a 2.5% gain from last week.
The euro was also about flat at $1.0668 and
sterling was little changed at $1.21775, both erasing
earlier small gains.
In cryptocurrencies, bitcoin took a breather after its surge
to a nine-month high of $28,474 on Sunday, last trading 1.8%
weaker at around $27,552.
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(Reporting by Kevin Buckland; Editing by Edwina Gibbs)
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