JPY flows: 2yr JGB yields dipped below 0%

Houthis fired an anti-ship cruise missile at a US Navy ship that was hot down by a U.S. fighter jet near the coast of Yemen and has not done any harm. This no doubt further escalates the geopolitical tension in the area as it is hard to see either the Houthis and U.S. to back down from the scenario. While we hope there will be less conflict, risk sentiment will remain on its toes as more U.S. military action will have a domino effect on the global scale. Right now, the market seems to be numb towards such headline and does not see the risk asset being affected and global equity indexes in the green. At the same time, 10yr JGB yields have broken below December low and 2yr yields briefly dipped below 0%, a level last seen in July.

The yield differentials once again pressure the JPY and see USD/JPY trading 0.28% higher at 145.28.