Oct 27 Lower House election: JGB yield decline on political turmoil likely limited
Key points
- Political turmoil unavoidable for now after ruling LDP/Komeito fail to secure majority of seats in Oct 27 Lower House election
- Nomination of next prime minister unclear, strong possibility of government led by "minority ruling coalition," led either by the LDP or the CDPJ
- "Risk-off" JGB yield declines, if ever, likely limited; concerns about increased fiscal risk could lead to bear steepening
