USD/JPY: negative spreads versus US bonds weigh - Scotiabank

Analysts at Scotiabank explained the latest on the Japanese economy rates and currency.

Key Quotes:

"Japan’s manufacturing PMI was finalized at 52.2 for Aug, down slightly from 52.8 in July. Yields on 10Y JGB’s fell 1.5bps today, turning negative for the first time since Nov as investors continued to purchases safer bonds amid focus on North Korea’s missile tests."

"Only Switzerland and Japan’s 10Y bonds currently offer negative returns among developed market FI at the moment. Negative spreads versus US bonds should help support USD/JPY."