Intriguing RV graphs: Impact of renewed concerns about falling behind curve
Key points
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Concerns about falling behind curve resurfaced amid proposed BoJ appointments, other developments; sharp JGB yield rise since last November primarily driven by these concerns
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Government wants to restrain market concerns over excessive fiscal expansion, but no strong messaging to counter expectations for slow rate-hiking pace
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If government pursues “high-pressure economy” monetary policy, pressure for steeper yield curve likely to persist; still room for 2s10s yield spread to widen