Attention Chart on 10/22

Today, the focus is on US interest rates, VIX, and MOVE.

Last night, the US 10-year bond yield reached 4.2%, leading to a weakening of the yen, which could provide tailwinds for Japanese stocks. However, stocks declined as the US yield spread may potentially turn positive.

With bond prices falling, the fear index of bonds MOVE increased to 129, reaching a new recent high. Despite the stock market decline, the VIX also fell. The pattern where the stock market becomes more optimistic while the bond market remains cautious usually leads to a sharp rise in the VIX afterwards.

There is sufficient momentum for a sharp rise in VIX after the US-Japan election, so positions should be handled cautiously.