Curve Implications of Progress in Iran Peace Negotiations

Mizuho analyzes how potential Iran peace talks and Japanese 'bridging bonds' will impact JGB yields, forecasting downward pressure on long-term rates despite persistent BOJ tightening expectations.

Key Takeaways

• 1.Progress in Iran peace negotiations is expected to exert downward pressure on global long-term rates as oil supply concerns ease.
• 2.The Bank of Japan (BOJ) is unlikely to pull back on rate hike expectations, with a June hike still considered highly probable despite the geopolitical easing.
• 3.The Japanese government's proposal for 'bridging bonds' to fund growth and crisis management is seen as a negative factor for the JGB market due to supply pressure.

Table of Contents

• Curve implications of progress in Iran peace negotiations
• Assessing rates impact of "bridging bonds" proposal
• DEVELOPMENTS THIS WEEK AND IMPLICATIONS FOR RATES OUTLOOK
• SHORT-TERM OUTLOOK (ONE WEEK – ONE MONTH)
• MEDIUM-TERM OUTLOOK (SEVERAL MONTHS – ONE YEAR)
• Risk scenarios
• Yen rates relative value and investment strategies
• RELATIVE VALUE SCORE TABLES

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