Investing.com - The dollar fell against the yen on Tuesday as investors sought safety in the Japanese currency amid a sell-off in U.S. stock markets due to sentiments that valuations have grown a little frothy.
In U.S. trading, USD/JPY was down 0.16% and trading at 102.37, up from a session low of 102.22 and off a high of 102.58.
The pair was expected to test support at 102.11, Friday''s low, and resistance at 102.65, Monday''s high.
U.S. stock indices fell on Tuesday, wiping out several days of record-high closings on sentiments that prices have risen too high and were due for a pullback.
The Dow 30, for example, has closed at record highs nine times in 2014, and the yen served as a safe-haven asset class of choice on Tuesday, though the dollar did flex its muscles against other currencies.
Rising Treasury yields, four months of solid monthly jobs reports and other upbeat economic indicators in the U.S. cushioned the dollar''s losses against the yen and strengthened it elsewhere.
On Friday, the U.S. Labor Department reported that the economy added 217,000 in May, close to expectations for a 218,000 increase.
It was the fourth consecutive month in which the U.S. economy added more than 200,000 new nonfarm payrolls.
The private sector added 216,000 jobs last month, exceeding expectations for a 210,000 gain.
Meanwhile, Treasury yields in the U.S. continued to rise on expectations that Thursday''s retail sales report will come in strong, prompting investors to reevaluate when the Federal Reserve will hike interest rates.
Fed officials have said some time will pass between the time monetary authorities wrap up stimulus programs, currently seen taking place at the end of this year, and when interest rates rise, forecast to take place sometime in 2015, though the timing of such still remains up in the air.
The yield on the U.S. U.S. U.S. 10-Year Treasury note rose to 2.65% earlier Tuesday, its highest in a month.
The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY down 0.53% at 138.63, and GBP/JPY trading down 0.46% at 171.48.
On Wednesday, Japan is to publish the latest reading of its BSI manufacturing index.