Key Market and Macro Headwinds from Dollar Strength, Rising Real Interest Rates, and the Renewed Run-up in the Oil Price

Japan is back in play (Finance Minister Katayama has been busy lately!)

Key Takeaways

• Japan Attracting Investor Interest: Japan is in play. The 10-year JGB yield sank -6.5 basis points today to 2.70%, the Nikkei 225 rallied +0.7% (+35% year-to-date!), and the bleeding in the yen has stopped. All this occurred in the aftermath of comments from Japan’s Finance Minister Satsuki Katayama to the effect that JGBs may soon be allowed to enter a tax-free investment program for the household sector, following the push to move Japanese financial assets from abroad back to the domestic market.