Intriguing RV graphs: Will BoJ's shift to more hawkish stance alter JGB yield curve trends?
Key points
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BoJ's hawkish stance bolstered at its January meeting; any change for JGB yield curve, which has undergone unusual steepening?
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Inflation expectations hold the key; given uncertainty surrounding neutral rate of interest, too early to tell if trend has already shifted to flattening
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Based on US/Europe experiences, not too late to adopt flattener transactions after confirming stabilization of inflation expectations