By Harry Robertson and Kevin Buckland
LONDON/TOKYO, March 28 (Reuters) - The U.S. dollar fell
slightly on Tuesday as receding fears of a full-blown banking
crisis slowed demand for so-called safe haven assets.
The yen rallied, despite traditionally also being a safe
haven, with analysts pointing to a pick-up in flows ahead of the
end of Japan's fiscal year on Friday.
The dollar fell as low as 130.51 yen , and was last
off 0.41% at 130.98 as the Japanese currency rose. That undid
some of the dollar's 0.64% jump against the yen in the previous
session, which tracked a large rise U.S. government bond yields.
Analysts said Japanese companies were likely to be selling
foreign bonds to bolster their balance sheets.
"The time of the year - the Japanese fiscal end - I think
there are some flows from Japanese repatriating," said Bart
Wakabayashi, branch manager at State Street in Tokyo.
"If that's it, it's pretty much a one-off, and then we'll
get back to basics, which is essentially following yields."
Elsewhere, the euro and pound rose as markets took solace
from First Citizens BancShares' agreement to buy all of failed
lender Silicon Valley Bank's deposits and loans, and the fact
that no further cracks have emerged in global banking.
The euro was last up 0.26% to $1.083. Sterling climbed 0.2% to $1.231, just below a two-month high.
"Markets are just generally a little bit risk-positive … and
the default position against that background is that the dollar
drifts lower," said Adam Cole, chief currency strategist at RBC
Capital Markets.
"We could be in this kind of risk-on, risk-off environment
for a couple of months," Cole added.
The U.S. dollar index - which gauges the currency
against six peers, including the yen - fell 0.15% to 102.6,
after a 0.26% drop on Monday.
Elsewhere, bitcoin fell 1.7% to around $26,700
after a 3% slide the previous day, amid problems at the world's
biggest cryptocurrency exchange, Binance.
The company and its founder have been sued by the U.S.
Commodity Futures Trading Commission (CFTC). The exchange also
suffered a technical glitch on Monday that forced it to
temporarily suspend some operations.
The risk-sensitive Australian dollar rose, getting an
additional boost from better-than-expected retail sales data. It
was last up 0.35% to $0.667 .
Simon Harvey, head of FX analysis at Monex Europe, said a
U.S. Senate hearing with top bank regulators later in the day
could cause some volatility.
"Officials still hold an information advantage on the state
of the banking sector," Harvey said.
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(Reporting by Harry Robertson and Kevin Buckland; Editing by
Alexander Smith and Angus MacSwan
)
Kevin.Buckland@thomsonreuters.com))
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