The U.S. dollar fell for a second day against major peers on Tuesday as receding fears of a full-blown banking crisis sapped demand for the safest assets.
Despite traditionally being a safe haven, the yen rebounded strongly from overnight losses, with analysts pointing to flows related to the end of the country's fiscal year on Friday.
The risk-sensitive Australian and New Zealand dollars went up, with the Aussie getting an additional boost from better than expected retail sales data.
The U.S. dollar index - which measures the currency against six peers, including the yen - declined by 0.16 per cent to 102.59 during Asian trading, extending Monday's 0.35 per cent drop.
The greenback plunged as low as 130.505 yen at one point, and was last off 0.71 per cent at 130.64, beating the previous session's 0.64 per cent jump when it tracked a 15 basis point surge in long-term Treasury yields, the biggest in six months. The 10 year yield was little changed in Tokyo trading on Tuesday at around 3.51 per cent.
Bart Wakabayashi, branch manager at State Street in Tokyo said that the Japanese fiscal end is the reason why there are some flows from Japanese repatriating.
If that's it, it's pretty much a one-off, and then we'll get back to basics, which is essentially following yields. Kristina Clifton, an analyst at Commonwealth Bank of Australia, wrote in a client note that Japanese banks may seek U.S. dollar funding ahead of Friday.
She said that the USD JPY can be volatile this week.
The euro was 0.1 per cent higher at $1.0809, while the sterling added 0.23 per cent to $1.2315.
The Aussie rallied 0.53 per cent to $0.6686. New Zealand's kiwi dollar rose 0.49 per cent to $0.62265.
The market is taking some solace from the U.S. lender First Citizens BancShares' agreement to buy all of Silicon Valley Bank's deposits and loans, but Wakabayashi says no one is complacent.
He said that there is a big cloud -- I won't say dark cloud, but definitely a cloud -- and I think people are positioning for what they need to do if this thing moves in the wrong direction.
The dollar is king for the moment, the dollar is safe, and the dollar is king. It won't be huge if it gets sold off, and it will bounce back. After a 3 per cent decline on Monday, the price ofBitcoin fell to around $27,000, which was on the back foot after a 3 per cent slide at the world's largest criptocurrency exchange, Binance.
The company and its founder have been sued by the U.S. Commodity Futures Trading Commission CFTC for operating an illegal exchange and a sham compliance program. The exchange was temporarily suspending some operations because of a technical glitch on Monday.