* Dollar index hits highest level since July 2010
* Bernanke QE comments lift U.S. bond yields and dollar
* MSCI Asia Pacific ex-Japan falls but Nikkei climbs
* JGB dive, 10-year JGB yield hits highest since April 2012
By Masayuki Kitano
SINGAPORE, May 23 Japanese government bond
prices dived and 10-year JGB futures tumbled a full point,
prompting the Tokyo Stock Exchange to temporarily suspend trade
as the dollar hit a near three-year high versus a basket of
currencies on Thursday.
After the resumption of trade, 10-year JGB futures recouped
some of their losses but were still down 0.71 point at 141.19
. The 10-year JGB yield jumped to as high as 1.0 percent
, its highest level since April last year.
The dollar's rise followed U.S. Federal Reserve Chairman Ben
Bernanke's testimony to Congress on Wednesday, in which he said
the Fed's massive bond-buying programme would remain in place
But a decision to scale back the $85 billion in bonds the
Fed buys each month could be taken at one of the central bank's
"next few meetings" if the economy looked set to maintain
momentum, he added.
The dollar index, which measures the dollar's value against
a basket of currencies, rose to 84.487 as of 0109 GMT,
its highest level since July 2010.
Against the yen, the dollar rose 0.4 percent to 103.55 yen
, having set a high of 103.74 yen on Wednesday, the
greenback's strongest level versus the Japanese currency since
After Bernanke's comments the focus will be squarely on
forthcoming U.S. economic data, said Hiroshi Maeba, head of FX
trading Japan for UBS in Tokyo, adding that a trend toward broad
dollar strength would probably remain in place.
"I don't think a there will be a change in the trend toward
dollar-buying coupled with selling of the yen and Swiss franc,"
Maeba said, adding that the dollar could rise to 105 yen in
relatively short term.
The yen's drop against the dollar boosted Japanese equities,
with the benchmark Nikkei share average surging 1.9 percent
and touching a 5-1/2 year high.
Some other Asian stock markets fell, however, with South
Korean shares down 0.6 percent and MSCI's broadest index
of Asia-Pacific shares outside Japan falling 0.8
U.S. Treasuries extended their losses in Asia in the wake of
Bernanke's comments, lifting the 10-year Treasury yield to a
two-month high of about 2.069 percent.
In commodities markets, Brent crude fell 0.3 percent to
$102.25 a barrel, while gold dropped 0.7 percent to
$1,358.36 an ounce.