FOREX-Dollar slips but underpinned by higher U.S. yields

* Greenback supported by rise in U.S. bond yields

* Dollar slips slightly, selling by model player cited

* Kiwi recovers from 3-week low after RBNZ statement

* BOJ holds off on new policy initiatives

By Hideyuki Sano

TOKYO, Oct 28 (BestGrowthStock) – A short-covering bounce in the
dollar paused on Thursday but traders said a rise in U.S.
Treasury yields could prompt more buybacks in the greenback
before the Federal Reserve’s policy meeting next week.

U.S. bond yields have risen this week partly as euphoria
over the Fed’s likely asset purchase programme is being replaced
by doubts over the size of such a move. [US/]

“A model player’s buying is pushing up the euro in thin
trade. But given that U.S. bond yields have risen, the dollar
will go in the same direction in the near term,” said a trader
at a Japanese brokerage.

The dollar’s fate has had a close correlation to U.S. yields
and their gap with rates on other currencies, as increases in
U.S. yields — other things being equal — tend to help the
greenback by making dollar investments more attractive.

With the gap between Japan and U.S. two-year yields near a
three-week high and that for 10-year yields near a 2-