Yen is recovering as fears of contagion from banking crisis grow

The safe-haven yen rebounded after early sharp declines and the risk-sensitive Australian and New Zealand dollars turned losses as early optimism about global authorities’ efforts to contain a banking crisis ebbed.

The Japanese currency, which is particularly sensitive to long-term Treasury bond yields, recovered from sharp losses of 0.6 percent to stabilize against the dollar after the yield on US ten-year bonds fell sharply near the start of trading in Europe after rising 12 basis points earlier.

The Australian dollar, which earlier rose 0.7% to a nearly two-week high of $0.6743, fell 0.2% to $0.6683 in the latest trading. The New Zealand dollar fell 0.3% at $0.6250, giving up previous gains of 0.7%.

And the yen reached in the latest trading to 131.79 per dollar, while maintaining gains of 2.5 percent from last week.

The euro was stable at $1.0671 and the pound sterling was little changed at $1.2189, erasing the small gains it had previously recorded.

The US dollar index, which measures the currency against six major currencies including the yen and the euro, settled at 103.80 after falling 0.7 percent last week.

In the cryptocurrency market, bitcoin took a break after rising to a nine-month high of $28,474 on Sunday, and recorded a 1.5 percent decrease in its latest trading at about $27,629.