CANADA FX-DEBT-C$ succumbs to rising US$ after govt yen move
* C$ at C$0.9725 vs US$, or $1.0283
* Bonds prices mostly higher across curve
By Claire Sibonney
TORONTO, Aug 4 (Reuters) - The Canadian dollar hit a more than three-week low against the greenback on Thursday after the government of Japan's intervention to stem the rise in the yen boosted the U.S. dollar across the board.
The yen sold off sharply after Japan intervened to stem the currency's strength to support its export-led economy, a day after Switzerland's central bank unexpectedly cut interest rates to cap a soaring Swiss franc -- the other safe-haven currency bought during the latest bout of financial stress. [FRX/]
"What we seen so far is basically like most of the majors, dollar/Canada is caught in the cross-fire of dollar/yen intervention," said Adam Cole, head of global FX strategy at RBC Capital Markets in London.
"We've seen what appears to be very, very large-scale buying of dollar/yen by the Bank of Japan overnight and that has just spilled over generally into dollar strength across the board and that's carried dollar/Canada higher with it."
At 7:31 a.m. (1131 GMT), the Canadian dollar CAD=D4 stood at C$0.9725 versus the U.S. dollar, or $1.0283, down from Wednesday's North American session close at $0.9626 to the U.S. dollar, or $1.0389. Earlier, it fell as low as C$0.9747, its weakest level since July 12.
Cole pointed to near-term Canadian dollar support at around C$0.98, near levels last seen at the end of June.
Later in the morning, focus will turn to any interest rate decision by the European Central Bank, as well as U.S. weekly jobless claims data ahead of Friday's crucial non-farm payrolls report.
Canadian government bond prices were mostly higher on the broad flight-to-safety mood, outperforming U.S. Treasuries across most of the curve, as lower-rated euro zone governments bonds stabilized on hopes the European Central Bank will resume its bond purchase program. [US/]
The two-year Canadian government bond CA2YT=RR was up 4 Canadian cents to yield 1.236 percent, while the 10-year bond CA10YT=RR added 28 Canadian cents to yield 2.635 percent. (Reporting by Claire Sibonney; editing by Jeffrey Benkoe)
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