Solving the yen mystery and the collapsing Japanese bond market
The Japanese yen has fallen to a 40-year low against the dollar, with the dollar rising above 160. This is a significant anomaly, as the yield spread between U.S. and Japanese 10-year government bonds has fallen to near its cycle low. In addition, the yen has lost its status as a classic safe-haven currency, and those who expect a trend reversal based on traditional rules may be sorely mistaken.
The Japanese yen has fallen to a 40-year low against the dollar, with the dollar rising above 160 – a situation that sharply contradicts textbook models. Furthermore, the yen has lost its status as a classic safe-haven currency, and those who expect a trend reversal based on traditional rules may be sorely mistaken.
