20 May 2024

πŸš€ Chart of the Week: Japan's Yield Curve is Steepening Again! πŸ“ˆ

Big moves in the Japanese bond market! The Japanese yield curve, which tracks the difference between 2-year and 10-year yields, has dramatically steepened since late March and surged even more in May. It's now at 63 bps, a level we haven't seen since January! πŸ“Š 10-year and 30-year Japanese yields are hitting decade highs, approaching 1% and surpassing 2%, respectively. As the Yen weakens, the Bank of Japan stepped in to support the JPY and recently cut its bond-buying program for the first time this year. What’s next? The BOJ might sell off its US Treasuries holdings, potentially driving US Treasury yields up in the coming months. Higher Japanese yields also mean US Treasuries are less attractive to Japanese investors, who are key players in the US market. Last summer, a sharp steepening of the Japanese yield curve coincided with a major sell-off in US Treasuries...πŸ€” #Finance #Investing #Bonds #JapaneseEconomy #GlobalMarkets #Economics #Investors #FinancialMarkets #BankofJapan #USTreasuries Source: Bloomberg


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