Intriguing RV graphs: JGB market to gradually factor in “high-pressure economy”
Key points
- JGB market gradually factoring in monetary policy changes driven by "high-pressure economy"; twist-steepening of short/medium-term OIS/forward curve
- Expectations for imminent rate hike receding, but expectations for future rate hikes rising slightly; latter likely anticipating future inflation acceleration
- Going forward, key to short/medium-term OIS/forward curve trends will be direction for inflation expectations; need to monitor forex, rice prices