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Investors rotated into US Treasuries on Thursday afternoon and knocked yields lower, while the dollar gave up its gains against the yen after the US said it used the most powerful conventional weapon in its arsenal to fight Isis in Afghanistan.

The benchmark 10-year yield declined as much as 5.16 basis points (0.0516 percentage points) from the highs of the day after the headlines emerged from several news outlets. Investors often turn to the safety of US debt during times of increasing geopolitical strife.

Meanwhile, the dollar shed a gain of more than 0.3 per cent against the yen.

America’s use of the powerful weapon would represent the latest step-up in the country’s military posture, after President Donald Trump ordered missile strikes on Syria last week after a chemical weapon attack.

In another sign of the rising jitters on Wall Street, the Vix index, a measure of expected stock volatility over the next month, shed a decline of 0.8 points, and turned 0.12 points higher.

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