THE REGIME VIEW

The regime view, over time.

A new version is recorded when the thesis changes, when a signal changes direction or is replaced, or when the condition that would change the view is rewritten. The current readings update with each edition. Dated evidence readings below preserve what was recorded without creating a structural version.

Each version’s own wording, in full.

Under “Previous wording”: what that version replaced, struck through.

A narrowing policy gap.

Open since

Dated evidence readings
  1. 2026-10-31

    US-Japan rate gap: At 2.625 points since September 24: the Fed held its range at 3.75 to 4 percent on October 28, and the Bank of Japan held at around 1.25 percent on October 30 by an 8-1 vote.

    The yen: Falling as of its last assessed session close, October 16; the dollar closed October 30 at about 157.8 yen, below the 165 line, with the dollar index also lower.

    US policy rates: Fed midpoint 3.875 percent, held on October 28 by a 10-2 vote; on October 29 the BEA put third-quarter growth at 3.4 percent and September PCE inflation at 3.6 percent; Treasury ten-year 4.94 percent on October 30.

  2. 2026-10-30

    US-Japan rate gap: At 2.625 points since September 24: the Fed held its range at 3.75 to 4 percent on October 28, and the Bank of Japan held at around 1.25 percent on October 30 by an 8-1 vote.

    The yen: Falling as of its last assessed session close, October 16; the dollar closed October 29 at about 157.8 yen, below the 165 line, and the Bank of Japan held on October 30.

    US policy rates: Fed midpoint 3.875 percent, held on October 28 by a 10-2 vote; on October 29 the BEA put third-quarter growth at 3.4 percent and September PCE inflation at 3.6 percent.

  3. 2026-10-29

    US-Japan rate gap: At 2.625 points since September 24: the Fed held its range at 3.75 to 4 percent on October 28, with two dissents for a rise, and the Bank of Japan's 1.25 percent stands until its decision on October 30.

    The yen: Falling as of its last assessed session close, October 16; the dollar closed October 28 at about 158.0 yen, below the 165 line, and the Bank of Japan decides on October 30.

    US policy rates: Fed midpoint 3.875 percent, held on October 28 by a 10-2 vote with two members preferring a rise; the ten-year Treasury yield was 5.05 percent on October 28.

  4. 2026-10-28

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 27, with the Fed deciding on October 28 and the Bank of Japan on October 30.

    The yen: Falling as of its last assessed session close, October 16; the dollar closed October 27 at about 157.5 yen, below the 165 line, and the Bank of Japan meets on October 29 and 30.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was 4.99 percent on October 27, and the Fed decides at 2 p.m. Eastern on October 28.

  5. 2026-10-27

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 27, with the Fed deciding on October 28 and the Bank of Japan on October 30.

    The yen: Falling as of its last assessed session close, October 16; the dollar bought about 156.9 yen at the New York noon reference on October 23, and the Bank of Japan meets on October 29 and 30.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was about 5.0 percent on October 23, and the Fed decides on October 28.

  6. 2026-10-26

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 26, with the Fed deciding on October 28 and the Bank of Japan on October 30.

    The yen: Falling as of its last assessed session close, October 16; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction, and the Bank of Japan meets on October 29 and 30.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was about 4.96 percent on October 22, and the Fed next decides on October 28.

  7. 2026-10-25

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 25.

    The yen: No session close since October 16; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was about 4.96 percent on October 22, with the Fed next deciding on October 28.

  8. 2026-10-23

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 23.

    The yen: No session close since October 16; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was about 5.13 percent on October 21, with the Fed next deciding on October 28.

  9. 2026-10-22

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 22.

    The yen: No session close since October 16; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was about 5.12 percent on October 20, with the Fed next deciding on October 28.

  10. 2026-10-21

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 21.

    The yen: No session close since October 16; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was about 5.15 percent on October 19, with the Fed next deciding on October 28.

  11. 2026-10-20

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 20.

    The yen: No session since October 16; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was about 5.09 percent on October 16, with the Fed next deciding on October 28.

  12. 2026-10-19

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 19.

    The yen: No session since October 16; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was about 5.10 percent on October 15, with the Fed next deciding on October 28.

  13. 2026-10-18

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 18.

    The yen: No session since October 16; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction, and no intervention has been reported.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield was about 5.10 percent on October 15, with the Fed next deciding on October 28.

  14. 2026-10-16

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 15.

    The yen: USD/JPY traded near 158.02 early on October 16, a morning quote after an October 15 dollar fall, so it does not isolate the yen; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield closed near 5.09 percent on October 15, down from about 5.19 the session before.

  15. 2026-10-15

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 14.

    The yen: USD/JPY traded near 157.81 early on October 15, a morning quote on the heels of an October 14 dollar rise, so it does not isolate the yen; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield closed near 5.19 percent on October 14, after that morning's release showed September consumer prices up 0.6 percent on the month.

  16. 2026-10-14

    US-Japan rate gap: At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 13.

    The yen: USD/JPY traded near 158.46 early on October 14, a morning quote that cannot show how the yen moved during the October 13 dollar decline; Japan's ten-year sold at an average yield of about 3.10 percent at the October 6 auction.

    US policy rates: Fed midpoint 3.875 percent, unchanged since September 16; the ten-year Treasury yield closed near 5.22 percent on October 13, below its October 9 close of 5.24.

  1. VERSION 6In force

    A narrowing policy gap.

    Thesis

    Previous wording The Bank of Japan's 1.25 percent rate took effect on September 24, narrowing the gap to the Fed to 2.625 points, the first narrowing in our tracking record. The standing idea is that a narrowing gap pulls the yen up. Monday, September 28 was the first session that could be read on its own, and the yen rose; Tuesday, September 29 read the same way, with the gap unchanged for a seventh session and the dollar up. Wednesday, September 30 moved four sen the other way with the dollar index up 0.08, a size inside the noise, recorded as an observation and not scored. Thursday, October 1 could not be read on its own: the dollar index rose 0.65 while USD/JPY barely moved, so the yen held up better than the broad dollar without being readable apart from it.

    The Bank of Japan's 1.25 percent rate took effect on September 24, narrowing its policy gap to the Fed to 2.625 points. The standing idea is that a narrower gap pulls the yen up, and as of October 2 that idea stands.

    Signals

    • US-Japan rate gapStable
    • The yenpreviously WatchFalling
    • US policy ratesWatch
    Why?
    US-Japan rate gap · Stable
    At 2.625 points since September 24: the Fed held its range at 3.75 to 4 percent on October 28, and the Bank of Japan held at around 1.25 percent on October 30 by an 8-1 vote.
    The yen · Falling
    Falling as of its last assessed session close, October 16; the dollar closed October 30 at about 157.8 yen, below the 165 line, with the dollar index also lower.
    US policy rates · Watch
    Fed midpoint 3.875 percent, held on October 28 by a 10-2 vote; on October 29 the BEA put third-quarter growth at 3.4 percent and September PCE inflation at 3.6 percent; Treasury ten-year 4.94 percent on October 30.

    What would change our view

    A session with the narrower US-Japan policy-rate gap still in place and the dollar flat enough to isolate the yen, in which the yen still weakens.

    Changed : thesis, The yen.

    Source edition
  2. VERSION 5

    A narrowing policy gap.

    Thesis

    Previous wording The Bank of Japan's 1.25 percent rate took effect on September 24, narrowing the gap to the Fed to 2.625 points, the first narrowing in our tracking record. The standing idea is that a narrowing gap pulls the yen up. Monday, September 28 was the first session that could be read on its own, and the yen rose; Tuesday, September 29 read the same way, with the gap unchanged for a seventh session and the dollar up. Wednesday, September 30 moved four sen the other way with the dollar index up 0.08, a size inside the noise, recorded as an observation and not scored.

    The Bank of Japan's 1.25 percent rate took effect on September 24, narrowing the gap to the Fed to 2.625 points, the first narrowing in our tracking record. The standing idea is that a narrowing gap pulls the yen up. Monday, September 28 was the first session that could be read on its own, and the yen rose; Tuesday, September 29 read the same way, with the gap unchanged for a seventh session and the dollar up. Wednesday, September 30 moved four sen the other way with the dollar index up 0.08, a size inside the noise, recorded as an observation and not scored. Thursday, October 1 could not be read on its own: the dollar index rose 0.65 while USD/JPY barely moved, so the yen held up better than the broad dollar without being readable apart from it.

    Signals

    • US-Japan rate gapStable
    • The yenWatch
    • US policy ratesWatch
    Why?
    US-Japan rate gap · Stable
    At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged as of October 2.
    The yen · Watch
    USD/JPY closed Thursday, October 1 at 157.56 against 157.40 on September 30, while the dollar index rose 0.65 to 102.10; published readings keep Japan's ten-year above 3 percent.
    US policy rates · Watch
    Fed midpoint 3.875 percent, unchanged since September 16; no October path rule has been registered in place of the one withdrawn on September 27.

    What would change our view

    Previous wording A session after September 24 with the gap narrowed and the dollar flat enough to read the yen on its own, in which the yen weakens.

    A session with the narrower US-Japan policy-rate gap still in place and the dollar flat enough to isolate the yen, in which the yen still weakens.

    Changed : thesis, invalidation.

  3. VERSION 4

    A narrowing policy gap.

    Thesis

    Previous wording The Bank of Japan's 1.25 percent rate took effect on September 24, narrowing the gap to the Fed to 2.625 points, the first narrowing in our tracking record. The standing idea is that a narrowing gap pulls the yen up. Monday, September 28 was the first session that could be read on its own, and the yen rose; Tuesday, September 29 read the same way, with the gap unchanged for a seventh session and the dollar up.

    The Bank of Japan's 1.25 percent rate took effect on September 24, narrowing the gap to the Fed to 2.625 points, the first narrowing in our tracking record. The standing idea is that a narrowing gap pulls the yen up. Monday, September 28 was the first session that could be read on its own, and the yen rose; Tuesday, September 29 read the same way, with the gap unchanged for a seventh session and the dollar up. Wednesday, September 30 moved four sen the other way with the dollar index up 0.08, a size inside the noise, recorded as an observation and not scored.

    Signals

    • US-Japan rate gapStable
    • The yenpreviously RisingWatch
    • US policy ratesWatch
    Why?
    US-Japan rate gap · Stable
    At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged for an eighth session.
    The yen · Watch
    USD/JPY closed Wednesday, September 30 at 157.40, four sen weaker than Tuesday, with the dollar index up 0.08 to 101.45; published readings keep Japan's ten-year above 3 percent.
    US policy rates · Watch
    Fed midpoint 3.875 percent, unchanged since September 16; our October path rule was withdrawn on September 27 before any settlement scored it, and no replacement estimate is carried until a rule is re-registered.

    What would change our view

    A session after September 24 with the gap narrowed and the dollar flat enough to read the yen on its own, in which the yen weakens.

    Changed : thesis, The yen.

  4. VERSION 3

    A narrowing policy gap.

    Thesis

    Previous wording The Bank of Japan's 1.25 percent rate took effect on September 24, narrowing the gap to the Fed to 2.625 points, the first narrowing in our tracking record. The standing idea is that a narrowing gap pulls the yen up. Monday, September 28 was the first session that could be read on its own, and the yen rose.

    The Bank of Japan's 1.25 percent rate took effect on September 24, narrowing the gap to the Fed to 2.625 points, the first narrowing in our tracking record. The standing idea is that a narrowing gap pulls the yen up. Monday, September 28 was the first session that could be read on its own, and the yen rose; Tuesday, September 29 read the same way, with the gap unchanged for a seventh session and the dollar up.

    Signals

    • US-Japan rate gapStable
    • The yenRising
    • US policy ratesWatch
    Why?
    US-Japan rate gap · Stable
    At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged for a seventh session.
    The yen · Rising
    USD/JPY closed Tuesday, September 29 at 157.36, a tenth of a yen firmer than Monday, with the dollar index up 0.17 to 101.37; published readings keep Japan's ten-year above 3 percent.
    US policy rates · Watch
    Fed midpoint 3.875 percent, unchanged since September 16; our October path rule was withdrawn on September 27 before any settlement scored it, and no replacement estimate is carried until a rule is re-registered.

    What would change our view

    A session after September 24 with the gap narrowed and the dollar flat enough to read the yen on its own, in which the yen weakens.

    Changed : thesis.

  5. VERSION 2

    A narrowing policy gap.

    Thesis

    Previous wording The Bank of Japan’s 1.25 percent rate takes effect Thursday, September 24, narrowing the gap to the Fed for the first time in our tracking record. The standing idea is that a narrowing gap pulls the yen up. No session has yet been able to read it.

    The Bank of Japan's 1.25 percent rate took effect on September 24, narrowing the gap to the Fed to 2.625 points, the first narrowing in our tracking record. The standing idea is that a narrowing gap pulls the yen up. Monday, September 28 was the first session that could be read on its own, and the yen rose.

    Signals

    • US–Japan rate gappreviously FallingStable
    • The yenpreviously FallingRising
    • US policy ratesWatch
    Why?
    US–Japan rate gap · Stable
    At 2.625 points since September 24: the Bank of Japan's 1.25 percent against a Fed midpoint of 3.875, both unchanged.
    The yen · Rising
    USD/JPY closed Monday, September 28 at 157.46, down 1.35 yen, with the dollar index up 0.23 to 101.20.
    US policy rates · Watch
    Our estimate of an October 28 increase last scored at about 60 percent on the September 21 settlement; Fed midpoint 3.875.

    What would change our view

    Previous wording A session after Thursday with the gap narrowed and the dollar flat enough to read the yen on its own, in which the yen still weakens.

    A session after September 24 with the gap narrowed and the dollar flat enough to read the yen on its own, in which the yen weakens.

    Changed : thesis, US–Japan rate gap, The yen, invalidation.

  6. VERSION 1Regime opened

    Replaced A widening policy gap. — closed : The Bank of Japan raised its policy rate to 1.25 percent on September 18. The gap narrows to 2.625 points from September 24, the first narrowing in our tracking record.

    A narrowing policy gap.

    Thesis

    The Bank of Japan’s 1.25 percent rate takes effect Thursday, September 24, narrowing the gap to the Fed for the first time in our tracking record. The standing idea is that a narrowing gap pulls the yen up. No session has yet been able to read it.

    Signals

    • US–Japan rate gapFalling
    • The yenFalling
    • US policy ratesWatch
    Why?
    US–Japan rate gap · Falling
    Narrows to 2.625 points from 2.875 when the new rate takes effect Thursday.
    The yen · Falling
    USD/JPY closed Monday at 157.05, up 0.92 yen, with the dollar index up 0.21 points.
    US policy rates · Watch
    An October 28 increase at about 60 percent on Monday’s settlement; Fed midpoint 3.875.

    What would change our view

    A session after Thursday with the gap narrowed and the dollar flat enough to read the yen on its own, in which the yen still weakens.

A widening policy gap.

Closed — The Bank of Japan raised its policy rate to 1.25 percent on September 18. The gap narrows to 2.625 points from September 24, the first narrowing in our tracking record.

  1. VERSION 1Regime opened

    A widening policy gap.

    Thesis

    The Fed’s unanimous hike widens the US–Japan policy gap. Oil’s retreat points to supply repair while Hormuz remains constrained.

    Signals

    • US policy ratesRising
    • Near-term oilFalling
    • US–Japan rate gapRising
    Why?
    US policy rates · Rising
    A quarter-point hike, with no dissent.
    Near-term oil · Falling
    Brent fell 2.68% as pipeline repair came into view.
    US–Japan rate gap · Rising
    Wider before Friday’s BOJ decision.

    What would change our view

    A BOJ hike that narrows the gap would weaken the divergence thesis.