* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E
TOKYO, Nov 10 (Reuters) - The yen recouped 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 and German partner BioNTech SE said a large-scale clinical trial showed their vaccine was more than 90% effective in preventing COVID-19.
While a jump in longer-dated U.S. Treasury yields helped push the yen to its biggest loss overnight since March, analysts said the currency pared losses as some traders took profit on the dollar.
In afternoon Asian trade, the yen firmed to 104.97 against the dollar.
Against the Australian dollar, the yen fetched 76.43, having lost more than 2% overnight.
“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.
But markets got a bit over-excited following the vaccine news considering the trial results are still preliminary, said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
Indeed, many questions about the vaccine are yet to be answered, 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.”
Riskier currency such as the Australian dollar steadied at $0.7281 against its U.S. counterpart, near a seven-week high touched on Monday as traders digested the vaccine news.
Across the Tasman sea, the New Zealand dollar last sat at 0.6833 per U.S. dollar, up 0.23% in Asian trade.
The euro was moderately higher at 1.1834, after dropping 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 held steady at 92.65, slightly above Monday’s 10-week trough of 92.12.
Sterling firmed 0.21% to $1.3187 against the greenback, near a nine-week high it touched in the previous session.
Elsewhere, the Turkish lira dropped nearly 1% to 8.1150 against the dollar as Turkey appointed former deputy prime minister Lutfi Elvan as its new treasury and finance minister. (Reporting by Eimi Yamamitsu; Additional reporting by Tom Westbrook; Editing by Christopher Cushing)