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BofA: BEI & JGBi May Rebound Long-Term

JGBS

Bank of America note that “the recent correction in BEI toward 0.6% (from 0.8-0.9% in Q422) and the current JGBi issue to real yield (from -0.7% in November) appears excessive as it has been driven by short squeeze in nominal JGBs, stronger than usual reaction to a rebound in JPY, and thin liquidity in the JGBi market. The FX and oil markets imply Japan's 10-Yearr BEI above +0.8% and strong CPI prints to come would likely support inflation expectations though thin liquidity makes it difficult to trade near-term”

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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