Intriguing RV graphs: Impact of coordinated Japan-US forex intervention on JGB market
Key points
Apparent coordinated Japan-US yen-buying intervention; yen appreciation to lower long-term yields via reduced inflation expectations
Sustained yield declines should hinge on whether the yen's depreciation has been driven by fundamentals
Interest rate differentials excluding term premium support a weaker yen from fundamental perspective; sustained yield declines unlikely unless concerns about the BoJ falling behind the curve ease