Japan's deflationary era is finally ending. A change in monetary policy is coming into sight, and that suggests higher yields.

The bias will be for a stronger euro. The European economy is looking good and there's lingering concern about inflation.

Monetary policy is not a panacea.

The economic outlook favors higher yields next year. The deflationary era has finally ended and a sustainable increase in consumer prices is likely to get underway soon.

I think monetary policy coming out of the 2001 recession did what it was intended to do, which was cushion the interest-sensitive sectors of the economy, including housing.

Domestic inflation reflects domestic monetary policy.