US 30-year bonds have broken the February/May lows and fallen below 3%.
Japanese 30s were down a massive 22 bps today to 1.30% and the nearly 170 basis point spread is attractive to Japanese investors. This is the reason why Bernanke and Fisher haven’t made a fuss about QE in Japan — it’s already helping to drive down borrowing costs in the US.
US 30 year bond yield chart
The shifts in bond yields point toward more room to run for USD/JPY.
