Dollar Sags as Treasury Doubles Down on Bond Buybacks

A Treasury Department decision to double its long-term bond buyback programme has sent ripples through currency markets, with the dollar losing ground against the yen and other majors. The move, aimed at easing liquidity strains and softening borrowing costs, has instead raised questions about Washington's tolerance for currency weakness.

With US debt now surpassing USD40 trillion and oil prices staying elevated, investors are recalibrating dollar exposure. The yen, often a beneficiary of dollar softness, has picked up a bid as traders weigh whether this intervention marks a structural shift rather than a temporary liquidity fix.

For USD/JPY traders, the buyback story adds a fresh macro layer to an already crowded catalyst calendar, reinforcing downside pressure on the pair as fiscal policy concerns intersect with currency positioning.