USD/JPY: yield correlation is near 0.72 now - BBH

Analysts at Brown Brother Harriman explained that the USD/JPY exchange rate remains highly correlated with the 10-year yield.  That correlation is near 0.72 now.  

Key Quotes:

That correlation is near 0.72 now.  

"It had reached 0.78 in early March, was one of the strongest correlations since 2000. The two-year interest rate differential is also important.  The correlation now is a little more than 0.62. "

"It had fallen to almost 0.45 in April after peaking near 0.67 in January and February.  Last year, the correlation did not rise above 0.60 in the first half and peaked in August near 0.67."