General yields have pulled back maintaining relative strength of US 10-yr treasury
The black line shows the US 10-yr treasury, the red line shows the German bund, the blue line shows the British gilt and the green line shows the Japanese 10-yr treasury. The above chart shows that since 17 May general yields have declined (green rectangle). As such, the US-treasury has still maintained its general relative strength against European yields, which is likely to make the USD an attractive destination. We do note that Japanese monetary policy is ultra-loose, with an effort to maintain its yield at 0%. As such the general decline of the US 10-yr treasury has been felt greatest against the Japanese economy. Therefore, besides the reputation of the JPY been a safe-haven with the majority of its debt being held domestically and although on an absolute basis the US/JP spread is positive, the spread contraction with Japan contributed to the USD decline against JPY over the last few days as geo-political tensions increased.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.