The USD/JPY is nearing the 160 level, close to its peak in July 2024. On 07/31/24 we saw the BOJ raise their policy rate to 0.25%. It triggered a global selloff in assets.

Japan is the largest foreign holder of US treasuries. If we see the Yen continue to depreciate against the US dollar could we see the BOJ take a different approach and sell a portion of their US treasury holdings. If so, this could flood the treasuries market and spike yields. A potential scenario to think about.

#money #usd #yen