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Yen Tracking Yield Spreads again?

By Ashraf LaidiCurrenciesMay 31, 2023 01:00AM ET
www.investing.com/analysis/yen-tracking-yield-spreads-again-200638566
Yen Tracking Yield Spreads again?
By Ashraf Laidi   |  May 31, 2023 01:00AM ET
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During yesterday's sleepy markets, I highlighted the rally in bund futures (rising prices, falling yields) may signal similar price action at the subsequent session, when US bond yields/prices return from Memorial Day Weekend. Today's bond price action did not disappoint, as the homogenous asset class moved in concert, delivering gap ups in prices and falling yields.

This was a desperately needed development for yen bulls (particularly USDJPY shorts). Interpret what you wish from the chart below as to which is the dependent and independent variable (USD/JPY or yield spread). Who leads whom? Shorting USDJPY has been the "pain trade" for our WhatsApp Broadcast Group as we await Wednesday's debt ceiling vote and the JOLTs survey. Hanging in there.

USD/JPY-Yields Spread Chart
USD/JPY-Yields Spread Chart

Yen Tracking Yield Spreads again?
 

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Yen Tracking Yield Spreads again?

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