Intriguing RV graphs: Unexpected resilience for 40-year JGB
Key points
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40yr JGB remaining relatively resilient despite rising upward pressure on yields due to escalating tensions in Middle East; 30s40s JGB compound yield spread briefly at zero
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Compared to US reciprocal tariff shock, narrowing of the spread somewhat surprising; influenced by supply-demand distortions for off-the-run issues
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Also, convexity value could be supporting 40yr JGB resilience. Inverted yield curve at long end actually quite common globally