MUMBAI (Reuters) - The rupee rebounded sharply on Tuesday after four consecutive sessions of losses as a weakening dollar prompted exporters to sell the U.S. currency while a spurt in buying by foreign investors in domestic debt also helped.
The yen gained sharply against both the dollar and the euro as investors sought the traditional safety of the Japanese currency amid end-of-year nerves over economic risks ahead.
Sentiment was also buoyed after foreign institutional investors bought a net of about 8.36 billion rupees ($131.59 mln) of government bonds on Monday, according to data available on the National Securities Depository Ltd website.
"Some corporate dollar selling and rise in major Asian currencies, led by the Japanese yen, are aiding the rupee," said Hari Chandramgethen, chief forex dealer at South Indian Bank Ltd.
The partially convertible rupee rose to 63.47 to a dollar after touching a low of 63.79, while the 10-year benchmark bond yield fell 7 basis points to 7.86 percent.
($1 = 63.5300 rupees)
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(Reporting by Suvashree Dey Choudhury and Dipika Lalwani; Editing by Subhranshu Sahu)