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