Bonds lift USD/JPY
It's all about bond and monetary policy today. Yellen said growth is increasingly broad based in a nod to higher rates in December. She won't be stick around for another rate hike beyond that but it speaks to the thinking at the centre of the Fed.
A series of hikes next year -- and perhaps more than the market is pricing in -- is a growing possibility. It's the same story in EUR/JPY where the same synchronized global growth story could quickly put the ECB behind the curve.
The US 10-year note yield is up 5 bps to 2.37% today, taking out the minor downtrend since the end of October. Yields have been narrowing into a wedge in the past month but appear to be breaking out and that could be a catalyst for a USD/JPY rebound.
