The 10-year US Treasury bond yields are about to break above 2.00%. In this case, the USD/JPY pair is set trend higher towards 116.00 ahead of 120.00 over the coming weeks, economists at Société Générale report.
The yen seems bound to remain cheap and get cheaper
“If we are going to see 10-year Note yields break 2% and the market price in a higher terminal Fed Funds rate (which seems highly likely) then USD/JPY 116 is going to break again and a move towards 120 will follow.”
“For now, and all the more so given the price of oil and other commodities, the yen seems bound to remain cheap and get cheaper. USD/JPY can trundle to 120 and interruptions on days of higher volatility are likely to be temporary.”
