Simple's Green Room

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A little something to chew on over the weekend from Oanda...
What to expect with Yen G7 intervention...



Ten-year notes are pushing yields to their lowest level in a year as risk aversion trading strategies intensified after last weeks Japanese earthquake. Investors are speculating that Japanese insurers will need to sell the longer dated maturities to pay claims for damage. The BOJ is trying to dispel this thought process.

The BOJ efforts to provide more liquidity and expand an asset-purchase program have thus far failed in halting the sale of global equities by risk avers investors. Even the Fed delayed buying back product yesterday as a plunge in yields at the time of the schedule close of the transaction added to volatility. With this risk aversion momentum, ten-year yields are in danger of breaching 3% in the short term.

Japanese investors are the second-largest foreign holders of US debt and own $882b of US Treasuries. The market is expecting them to be a net seller to finance their immediate operations.



full story...
http://forexblog.oanda.com/20110317/what-to-expect-with-yen-g7-intervention/