Intriguing RV graphs: "New LDP president Takaichi trade" set to begin
Key points
- Sanae Takaichi wins surprise victory in LDP leadership election; we basically expect JGB yield curve shift toward twist steepening
- But, this time, as long as expectations for BoJ rate hikes over the medium term continue to linger, medium/long-term JGB yields may prove resilient
- Caution needed for super-long JGB yield initial reaction; while Takaichi has toned down her fiscal expansion stance, super-long JGB liquidity has declined