U.S. Dollar/Japanese Yen, Bonds, and Yields
The most interesting pair is the U.S. dollar/Japanese yen. In U.S. markets, the arrangement is supposed to work as the Japanese yen is the Treasury-bond price follower and the U.S. dollar is the JGB yield seeker in Japanese trading. This correlation doesn't always hold on the Japanese yen side. Remember interested pairs for the BOJ in terms of their TWI. That arrangement was Japanese yen/U.S. dollar. This arrangement changes the bond/yield correlation in U.S. trading.
Japanese yen/U.S. dollar allows the U.S. dollar to be the bond-price follower and the Japanese yen to be the yield seeker. In this manner, the Japanese earn yen in terms of yield against the U.S. dollar, especially as the Japanese yen/U.S. ...
Get Inside the Currency Market: Mechanics, Valuation, and Strategies now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
