USD/JPY gyrating with US 10 year Treasury note - Westpac

Local news flow has been light for the yen this last week, keeping the focus on US yields with the USD/JPY consolidating around 113 as the 10 year T-note holds around 2.30-2.35%, for now lacking the impetus to punch higher, according to Sean Callow, Research Analyst at Westpac.

Key Quotes

“A hurricane-damaged US employment report seems an unlikely catalyst for a surge in yields though average earnings should be unaffected and seem due for a bounce.”

“Portfolio flows data for the final week of Sep showed the largest net sales of foreign bonds by Japanese investors since April ($9bn) but could be linked to financial half-year end.”

“Scope for USD/JPY to mark out a somewhat higher range, mostly 113-114 if USD is broadly firm. But as always, risk aversion lurks, with plenty of room for dips in USD/JPY when it returns.”