Nothing happening on the calendar? Might as well squeeze bond shorts.

USD/JPY has taken a tumble since the start of US trading, falling to 101.71 from 101.99 in a quick move lower.

The catalyst is the bond market as US 10-year yields fall to the lowest since July at 2.4661%, down 4.5 basis points on the day.

US 10 year yields

US 10 year yields

A close below the white line at 2.4691 would clear the major support lines on the chart and pave the way to much lower levels. It’s hard to believe bonds could be rallying with the Fed tapering but consider this:

German 10s are at 1.35% and French 10s are at 1.73%. There’s still a crisis in Europe, you say, and rates will be cut next week. Fine. Then consider Canadian 10s are yielding 2.25% with an overnight rate at 1.00% and no central bank hocus-pocus.