Japanese Yen Strengthens as Over Yield Curve Inversion - Forex News by FX Leaders

Japanese Yen Strengthens as Over Yield Curve Inversion

Posted Thursday, August 15, 2019 by
Arslan Butt • 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.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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