US 10-year yields briefly edged through the 3.50% zone yesterday but have definitively broken through today. Some bond market watchers were calling for a double top but the 8 bps rise today to 3.57% likely puts that to rest.
The climb in 10-year yields comes with the rest of the curve also hitting cycle highs today. 2s are up 2.7 bps to 3.97% and 30s are up 8 bps to 3.58%.
The Fed's QT and inflation are the main catalysts for rising yields and -- from the Fed's perspective -- you have to wonder if this rise at the long end is a threat to their credibility to bring inflation back down.
In any case, it's a bullish development for USD/JPY. If you're faced with the choice of getting 0.25% for 10 years in Japan or 3.57% in the US, it's not a long debate.
