Back
8 Apr 2013
Forex Flash: USD/JPY tracking the US Japanese 10yr Interest Rate spread - BBH
FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman notes that USD/JPY has been tracking the US-Japanese 10-year interest rate differential.
He sees that the spread widened from about 85bps in the middle of November, when the Japanese election was called, to 140 bps by the middle of March. He writes, “That corresponded roughly to the dollar's peak against the yen (prior to this week) on March 12 near JPY96.70. The differential then narrowed as the dollar slipped against the yen, reaching a multi-week low this past Tuesday (April 2) near JPY92.60.”
He sees that the spread widened from about 85bps in the middle of November, when the Japanese election was called, to 140 bps by the middle of March. He writes, “That corresponded roughly to the dollar's peak against the yen (prior to this week) on March 12 near JPY96.70. The differential then narrowed as the dollar slipped against the yen, reaching a multi-week low this past Tuesday (April 2) near JPY92.60.”