A week after brushing the 4% level after the BRICs started making noises about bypassing Treauries for IMF issued bonds, the 10 year note stands a full 40 bp lower, at 3.60% this afternoon. The dollar has benefited from the lowered level of anxiety regarding foreign funding of the US deficits on balance but USD/JPY is the exception.
The buck has been grinding lower for much of the week undermined by the decline in US yields. Greener pastures like emerging markets and high-yielders like Australia are probably picking up those flows, at the margin.
USD/JPY is finding support at 95.50/55 this afternoon while heavy offers are seen on rallies to 96.00/05 near-term.
