Spread Widening Favours USDJPY
US 10y Treasury yields have risen 9.5bp since Friday’s open, setting a new two year high as the countdown to the September FOMC meeting continues. A sell-off in the US Treasury market usually affects core bond markets elsewhere, but JGBs seem to have forgotten this tradition. For example, the 10y JGB yield has only climbed 1.5 bp since Friday’s open, and so the USJapan bond spread continues to widen in favour of USDJPY upside
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