Do the Math: Dollar Down, Bonds Down

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After a few days of gunning for 150 yen to the dollar, traders finally brought the yen back a bit. Treasury bonds have suffered as a result.

The Japanese yen regained its footing after two officials said they aren't opposed to currency intervention. The 30-year benchmark was off 5/32 as of 11:15 a.m. EDT to trade at 106 15/32. The yield rose to 5.67%.

Expectations as reported by

Reuters

Both Finance Minister

Kiichi Miyazawa

and

Haruhiko Kuroda

, director general of the Japanese Finance Ministry's International Bureau, sounded more energetic than he has in the last several days with regard to intervening to bolster the yen. Dollar/yen was off 0.80 to trade at 144.80.

Today's economic data weren't unfriendly -- the index of leading economic indicators was down 0.2% in June, in line with expectations. However, this number wasn't moving the market, and neither were factors such as the relative strength in the bond contract (only off 2/32 to trade at 123 9/32) or the impending Treasury refunding.

Dana Johnson, head of capital markets research at

First Chicago Capital Markets

, said the Treasury refunding -- auction announcements commence tomorrow -- is unlikely to affect this market, save for the usual jockeying in bond levels that greet the refunding.

"I don't think that's weighing particularly heavy on the market right now," said Johnson. "We're trading on Asia, and the currency implications of the Asian situation and how that's going to spill over into the U.S. economy -- it's not much of a supply trade."

Or any kind of trade. Volume was down 15% in early trading, according to

GovPX

.