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Rise in US Yields Dragging Yen Pairs with It: US 10-Year Yields, EUR/JPY, GBP/JPY
Over the long-term, Yen and US bonds are positively correlated to each other. When bonds go down, interest rates go up. So, USD/JPY and interest rates are also positively correlated. This year, that relationship did not always hold as USD/JPY was more in correlation with the US Dollar than interest rates. However, since mid-November, the lower Yen/higher interest rates relationship has come back into favor. US 10-year yields have been moving in an upward sloping channel since August 5th from 0.504% to a high of 0.982% on November 11th. In doing so, yields had a false breakout about the previous highs of 0.954% on ... (full story)