FOREX-Yen pressured as vaccine hopes boost risk appetite

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Eimi Yamamitsu
TOKYO, Nov 10 (Reuters) - The yen scraped back some losses
against the U.S. dollar on Tuesday, after the safe currency took
a drubbing on news of the development of a coronavirus vaccine
which raised optimism of a global economic recovery.
U.S. drugmaker Pfizer Inc PFE.N and German partner
BioNTech SE BNTX.O said a large-scale clinical trial showed
their vaccine was more than 90% effective in preventing
COVID-19. The yen JPY=EBS edged higher to 105.07 against the dollar,
after suffering its biggest loss overnight since March. It
fetched 76.42 against the Australian dollar, having lost more
than 2% overnight AUDJPY= .
"What's important about the overnight movement is that it
overturned the current trend of the U.S. dollar falling, instead
of the yen, when the market turns risk-on," said Masafumi
Yamamoto, chief currency strategist at Mizuho Securities.
"The yuan and euro have been rising against the dollar as
equities jumped on Joe Biden's election win... But the overnight
movement flipped things back to the way it is when markets
usually turn risk-on: U.S. Treasury yields rise and the yen
depreciates more than the dollar."
The vaccine news comes as the global tally of COVID-19
infections reached 50.68 million on Monday, stoking worries of
more lockdown measures across the globe. Some analysts said markets over-reacted to the news because
questions about the vaccine remain, such as how effective the
vaccine is by ethnicity or age and how long immunity may last.
"Perhaps the market did over-react to the vaccine, given
there's still some way to go prove that it's safe," said Westpac
currency analyst Imre Speizer.
"What they've shown is that it's reasonably effective,
safety is another stage. Once the market looked into the finer
print of what these results were, maybe they backed off the
trade a bit."
The Australian dollar steadied at $0.7275 against its U.S.
counterpart AUD=D3 after touching a seven-week high on Monday.
The euro EUR=EBS stood little changed at 1.1819, having
fallen more than 0.4% overnight.
The prospects of a Biden presidency has boosted risk
sentiment as many believe it could boost international trade
relations and maintain an easy monetary policy.
Still, incumbent Donald Trump has made no sign of conceding
and his campaign is planning a series of rallies to build
support for legal fights challenging the election results.
U.S. Senate Majority Leader Mitch McConnell on Monday said
President Donald Trump was completely within his rights to look
into "irregularities" from the election. Trump also said he had "terminated" Defense Secretary Mark
Esper, signalling he may use his final months in office after
defeat at the polls to settle scores within his administration.
Against a basket of currencies, the dollar =USD held
steady at 92.75, slightly above Monday's 10-week trough of
92.12.