Yields on Yen-hedged Treasury bonds are expected to become positive for the first time in two years due to the increase in US rates following Donald Trump's election victory.

The recent interest-rate cuts by the Federal Reserve have also contributed to a decrease in hedging costs, making these investments more appealing.

Currently, US 10-year yields adjusted for currency hedging are at minus 13 basis points. This is a significant change as hedged yields have been below zero since September 2022, mainly due to the Fed's interest-rate hikes that raised the cost of shorting the dollar against the yen.

Investors are closely monitoring these developments as they could indicate a new trend in the Treasury market.