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JGB yields likely to remain elevated even after forex intervention
Long-term and super-long-term JGB yield scenario for August
Long- and super-long-term JGB yields are likely to remain elevated in August.Concerns that the BoJ may be too slow in raising rates and fall behind the curve, together with worries about expansionary fiscal policy, are likely to weigh on the market. Key points to watch include 1) rate hike anticipation in the wake of the Bank's July meeting, 2) the effectiveness of the Japanese government’s forex intervention, and 3) budget requests, which must be submitted by the end of August.
Forecast range (intraday basis) :
10-year JGB yield: 2.700%–2.950%
30-year JGB yield: 3.875%–4.200%