Japanese Yen Strengthens as Over Yield Curve Inversion

The Japanese yen continued to trade strong on early Thursday on the back of US Treasury bond yields inverting for the first time since 2007

Arslan Butt•Thursday, August 15, 2019•1 min read

The Japanese yen continued to trade strong on early Thursday on the back of US Treasury bond yields inverting for the first time since 2007, giving more support to the safe haven appeal. At the time of writing, USD/JPY is trading at 105.86.

On Wednesday, for the first time in over 11 years, the yield on the 2-year US Treasury bonds traded higher than that of the 10-year US Treasury bonds, which is a sign that the US economy could be heading towards a recession. In the Asian session, the 10-year Treasury yields fell to their lowest levels in three years while the yield on the 30-year Treasury bonds declined below the 2% rate.

The increased risk of a recession has plummeted the market sentiment further and pushed up the demand for safe haven assets and currencies, including GOLD, JPY and CHF. Adding further pressure on the risk-off sentiment were disappointing economic data releases from China and Germany, which further cement the possibility of the global economy weakening.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Open a FREE Trading Account

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.