Senior VP Thomas Byrne is speaking in Tokyo after his firm cut Japan’s credit rating this morning.
They cited the risk of higher JGB yields putting the pressure on debt affordability and the news has done just that. Ratings changes can have a sizeable impact on those holding bonds either as investments or collateral and that may have been a big part of the sharp move we saw as money shifted out of Japan and into higher rated securities.
JGB’s are at 0.428% from an 0.418% low.
JGB daily 01 12 2014
Yen pairs have made a comeback since the news took the legs out from under them. USD/JPY is back up at 118.50 while GBP/JPY has undone virtually all of the 130 pip move lower.
