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The tale of two yields
After over three decades, the Japanese Nikkei 225 index has finally surpassed the previous peak. This significant milestone was achieved through a combination of attractive valuations, a weakening yen, and a rebound in global equity markets. chart The TOPIX and Nikkei 225 ratio closely mirrors the spread between Japan's 10-year and 2-year yields. Historically, a flattening yield curve sees the TOPIX underperform relative to the Nikkei 225. Despite a recent notable yield curve steepening, the ratio remains lagging. chart The USD/JPY pair has breached the 150 level, forming a distinct cup-and-handle continuation ... (full story)