JGB Market Compass

Envisioning JGB yield curve changes due to additional rate hikes after ending NIRP

• JGB market focus shifting from timing for ending NIRP to subsequent monetary policy path

• Foreign investors assuming additional 25bp rate hike by end-2024, but Japanese investors see little likelihood of additional rate hike this year

• Assuming textbook bear-flattening of JGB yield curve when additional rate hikes made; relatively limited upside for 10yr JGB yield