The yen is crashing, and the 10-year treasury yield is exploding, something big is happening in the market. The market has experienced a parabolic increase in treasury yields. The chart of dollar yen lines up almost exactly with the chart of treasury yields, indicating a correlation between the two.
Treasury yields have broken through to 161, indicating a significant and rapid increase. The sudden spike in 10-year treasury yields and the breaking of the dollar Yen above 160 could indicate a significant and unexpected shift in the global financial market.
If Japanese financials are liquidating treasuries, it could have a short run impact on the treasury market.
Market Impact and Correlation
Rising Treasury yields and potential Japanese bank liquidations of treasury positions are causing concerns about the impact on the global economy and the stability of the yen. The yen is crashing, and the 10-year treasury yield is exploding, something big is happening in the market. If Japanese financials are liquidating treasuries, it could have a short run impact on the treasury market.
Building a Support System
Japanese banks are facing unexpected funding costs due to the inverted treasury market, leading to the need to sell treasuries to buy higher yielding, riskier assets
Investors are reaching for higher yields by buying riskier assets, leading to potential losses in AAA tranches and potential systemic risk for global dealer banks and the euro dollar system.
Japanese banks are focusing on funding costs due to yen depreciation and negative risks, leading to rate hikes and inflation concerns in a weakening global economy
Conclusion
Market is showing signs of potential recession, leading to losses in various corporate structures and a lack of buyers, causing prices to plummet.
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