The dollar steadied against the yen on Wednesday, as U.S. yields pulled back from lows hit on concerns about a worsening trade feud between Washington and Beijing, although persistent worries about the trade rift are likely to cap any greenback recovery.
The dollar was little changed at 110.08 yen following its retreat to an eight-day trough of 109.55 on Tuesday after U.S. President Donald Trump threatened to slap more tariffs on China, prompting an angry response from Beijing. Escalating tensions triggered risk aversion and caused a sell-off in global equities.
The yen is often sought in times of political tension and market turmoil.
The dollar managed to bounce back against the yen as a degree of calm returned to broader markets and Wall Street shares pared a bulk of their losses, while safe-haven U.S. Treasury yields climbed from three-week lows.
Better-than-expected U.S. housing data also nudged Treasury yields off their lows on Tuesday.
"The threat of a trade conflict is a theme that could eventually override tax cut-induced benefits the U.S. economy is experiencing at the moment."
The euro was down 0.05 percent at $1.1584, shaky after slipping to a two-week low of $1.1528 overnight after European Central Bank President Mario Draghi called for a patient approach to European monetary policy at a forum in Portugal.
"Along with the Swiss franc and the yen, the dollar is also a safe haven currency, although perhaps less so than the yen," Kadota at Barclays said. "The dollar's safe-haven status, however, could come under question as it has also become a high-yielding currency."
The Swiss franc was little changed at 0.9948 franc per dollar after gaining about 0.1 percent overnight.
The 10-year U.S. Treasury note yielded 2.896 percent after dropping to as low as 2.853 percent on Tuesday.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)