Intriguing RV graph: Foreign currency funding costs after Upper House election
Key points
- Does Upper House election results impact foreign currency funding costs? Revisited JPY cross-currency basis movements vs GBP during “Truss shock”
- During “Truss Shock,” negative spread for GBP/USD cross-currency basis widened; higher USD funding costs for GBP holders
- Widening negative spread for yen since early July, but extent limited; must monitor this trend as it could impact JGB investment behavior