This isn’t the primary time I am going with this headline this week. 😆 The greenback is weaker on the stability however the transfer in USD/JPY is somewhat outsized on the day. The pair is down 0.8% to 150.30 at the moment and is nudging nearer in the direction of a key take a look at of the 150.00 degree subsequent. I’ve outlined some believable causes for the draw back transfer within the linked publish however including to that’s undoubtedly the continued rise in Japan authorities bond yields. That’s resulting in a narrowing within the charge differential between 10-year yields within the US and Japan this yr.
USD/JPY vs US10Y-JP10Y charge differential
For some context, 10-year JGB yields at the moment are at 1.44% – its highest since November 2009. This comes as market gamers are testing the bounds of a extra hawkish BOJ, with pondering that issues will choose up even faster once more after the spring wage negotiations in March.
10-year JGB yields (%) month-to-month chart
Going again to USD/JPY, a take a look at of the 150.00 degree beckons now. A break of that can draw within the 50.0 Fib retracement degree of the swing greater since September at 149.22 subsequent. Alongside that, the December low of 148.63 can even be a degree of rivalry on a break of 150.00 within the classes forward.
