From the U.S. yield curve perspective, is the yen depreciation also limited?
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Now, the theme this time isThe U.S. Yield Curve.
As of October 4, 2017, U.S. Treasury yields are as follows.
★ 10-year: 2.330%
★ 2-year: 1.475%
★ 10-year − 2-year: 0.855%
If you overlay the yield gap (red, right axis) with the USD/JPY rate (blue, left axis), it looks like the following.
As a general trend, when the yield gap narrows, the yen strengthens (USD/JPY falls), and when the yield gap widens, the yen weakens (USD/JPY rises).
Recently, yields on the 10-year and 2-year bonds have also risen, but not to the same extent as the USD/JPY rate.
Given that the rate at which the 10-year minus 2-year yield steepens (called steepening) is limited, I also believe the yen depreciation against the dollar is limited.
Note) The above is my personal view and is intended solely to improve financial literacy. Therefore, it is not created for investment solicitation. The final investment decisions must be made at your own risk.
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