Over the last decade there has been a pretty decent relationship between the value of the Japanese Yen and the shape of the US Treasury yield curve. When the Yen strengthened, the US yield curve steepened--presumably based on the conclusion that a stronger Yen makes Japan less competitive internationally and thus helpful to US economic growth. When the Yen weakened, the US yield curve flattened--presumably on the opposite belief that a weaker Yen made Japan a more formidable competitor, thus pressuring US economic growth.
In the last couple weeks, the Yen has broken down below 107 to the weakest levels since 2008. Will this put pressure on the US yield curve? At present levels, the Yen suggests that the steepness of the 3 month to 10 year US Treasury curve should be near the 2012 lows of 1.5% rather than the current 2.6%.