5 yr Japanese Rates...
This is growing risk for JPY bears - add to this we have big shift in bias from SHORT JPY to neutral... I am beginning to believe in the JPY from here.. but I am merely farmers son from Denmark...
There is already major change in rate differentials. Below I plotted JPY 1yr fwd vs USD 1yr fwd....It also indicates top could be in place.. last few hours there has even been, wrongly, rumors that BOJ may hike earlier based on better outlook.
Note the big drop in the white line, which, non-tested, seems to lead the USDJPY relationship.
Finally, there is must read for people concerned about Stagflation:
Caroline Baum, Bloomberg: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ak6GESHlmjp0