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.
Investors should get used to U.S. Treasury yields rising toward 4 percent as the 30-year bull market in bonds comes to an end, according to Jim O’Neill, former chairman of Goldman Sachs Asset Management.
The euro weakened against its most-traded counterparts as a drop in German industrial production, lower U.K. growth forecasts and ratings cuts for Spain and Italy raised concern Europe’s sovereign-debt crisis is worsening.