USD/JPY Intermarket Analysis: 10Y spread sees head-and-shoulders breakdown, favors JPY bulls

• The daily chart of the spread between the 10-year US Treasury yield and the 10-year Japanese government bond yield shows a head-and-shoulders breakdown - a bearish reversal pattern -  which indicates scope for a slide to 251 basis points (December 2016 high). At press time, the spread stands at 274 basis points.
• A downside break in the 10-year yield spread means the USD/JPY is more likely to remain under pressure in the near-term.
• It's worth noting that currently, the spread is trading at its lowest level since the end of March. Meanwhile, USD/JPY is up 5.13 percent from the March 29 low of 104.63.

US-Japan 10-year yield spread