Although his comments helped the market shift back to widespread interest rate differentials and buy back the dollar, the US unit is not likely to maintain its upsurge much longer.
More Quotes from Ryohei Muramatsu:Yields will have a bias to rise as concern about an inflation bulge is reignited. A rate increase in March is almost a done deal and there's a chance for another move in May.
On the other hand, it is now believed that the Bank of Japan will hold interest rates, in effect, at zero for a prolonged period because of strong political pressure.
Recent rises in yields of Japanese government bonds, combined with this emerging uncertainty over prospects for US interest rates, are expected to weigh on the US currency against the yen in the near term.
We are seeing dark clouds on the horizon because of slowing housing markets. The inverted yield curve could be a sign of a slowdown in the economy. Treasuries yields are unlikely to rise.
The lower demand at the five-year auction may continue in auctions in the coming weeks. This will lead investors to adopt a wait-and-see attitude for the time being.
The market is more inclined to the perception that US interest rates will rise further.
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