Yen Pressure Spills Over into US Treasury Market

The recent US inflation data has provided some relief for Treasuries, easing concerns about higher interest rates. However, this pressure is far from over, and real yields are likely to remain high.

The fiscal numbers are showing signs of weakness, which could impact Treasuries in the coming weeks and months. One key factor to watch is the yen's influence on US Treasuries, as there appears to be a link between the two.

A clear impulse from recent yen pressure is running through to Treasuries, although it may be nothing more than a coincidence. The Regional Head of Research for the Americas at a financial institution notes this connection and cautions that investors should keep a close eye on how the yen is handled in the coming weeks.