* Mnuchin tells FT he sees USD strength in long term as
* Treasury yields rebound from 5-mth lows to also lift
* USD/JPY gains limited by caution before US-Japan economic
By Shinichi Saoshiro
TOKYO, April 18 The dollar pulled away from
five-month lows versus the yen early on Tuesday, with comments
from U.S. Treasury Secretary Steven Mnuchin and higher debt
yields giving the bruised greenback some breathing space.
Mnuchin told the Financial Times that he agreed with U.S.
President Donald Trump's view that the dollar's strength in the
short term was hurting exports, but that he also saw the
currency's strength over the long term as a positive.
Mnuchin's comments were seen to have played down views
expressed by the president, who noted last week that the dollar
was too strong, sending it reeling.
The dollar added to overnight gains and was up 0.3 percent
at 109.190 yen. It had sunk to a five-month trough of 108.130
earlier on Monday on investor wariness towards tensions in the
Still, the dollar was not expected to go much further as the
United States begins a first economic dialogue with Japan later
Concerns are that the United States could take a tough trade
stance against Japan, which has been wary of Trump's complaints
that it and other countries have artificially weakened their
"For dollar/yen, the main focus will be on what kind of
pressure the United States could apply on Japan as basically
U.S. trade policy is linked with a policy for a weaker dollar,"
said Junichi Ishikawa, senior forex strategist at IG Securities
"The yen cannot simply continue weakening along with higher
stocks under such conditions," he said.
Ishikawa said tensions over North Korea "still linger and
there is also the upcoming French elections. Faced with such
risks, dollar/yen looks to be firmly capped."
The dollar index against a basket of major currencies was up
0.1 percent at 100.360.
The euro was steady at $1.0643, having seen limited
movement on Monday, when many European markets were shut for the
The Australian dollar stood little changed at $0.7591
. The Aussie nudged up above $0.7600 the previous day on
upbeat Chinese growth data. However, weaker prices of iron ore,
Australia's key export, have prevented the currency from staying
above that threshold.
Treasury yields rose from five-month lows on Monday as
stocks gained, reducing demand for safe-haven debt.
(Editing by Richard Borsuk)