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Fixed Income Commentary

Intriguing RV graphs: Turning point for JGB market?

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Intriguing RV graphs: Turning point for JGB market?      

Key points
  • 10yr JGB yield briefly fell below 2.8%; narrowing trend for 2s10s JGB yield spread; turning point for JGB market?

  • Narrowing of term premium excluding asset swap spread (reduced monetary policy uncertainties and inflation risks) contributing to 10yr JGB yield decline

  • Future JGB market direction depends on whether main factor is economic downturn concerns or speculation that Takaichi administration is phasing out its reflationary policies

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