The yen dropped to a seven-year low against the dollar as investors bet Japan’s Prime Minister Shinzo Abe will win an early election, renewing his mandate to pursue stimulative monetary policy and structural changes.
The greenback pared gains amid speculation it gained too much, too fast, and as U.S. Treasury yields fell. The currency jumped earlier as a private report showed U.S. companies added more than 200,000 workers for a sixth month.
Treasuries fell for the first time in three days on speculation a shutdown of the U.S. government may end soon enough for lawmakers to work on extending the debt limit, minimizing damage to the economy.
Treasury 10-year note yields were in the narrowest range in seven weeks as investors weighed whether the U.S. economy was strong enough for the Federal Reserve to reduce bond purchases designed to hold down borrowing costs.