Fixed Income Commentary

How will JGB curve respond to Ishiba's resignation announcement?

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How will JGB curve respond to Ishiba's resignation announcement?

Key points
  • Prime Minister Ishiba announced his intention to step down on evening of September 7; the next morning, stocks and bonds rose (the latter only slightly) and yen fell
  • Market is closely focused on candidates' fiscal stances, but ability to implement policy will hinge on cooperation and coalition-building negotiations with opposition parties
  • Increased stability in policy conduct could ease fiscal concerns, potentially triggering reversal of recent bear steepening

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