Implications of historic coalition defeat for yen and JGB yields
Key points
- Ruling coalition loses majority in July 20 Upper House election; although Ishiba declares to stay on, political situation is extremely fluid
- Yen rose initially on news that Ishiba intended to continue as PM, but fiscal concerns remain potential source of selling pressure on Japanese currency
- 10-year JGB yield initially declined, although potential for bull flattening of curve is unlikely to persist
