An earthquake in the Japanese bond market after the announcement of the Trump trade deal! 🇯🇵💣 $ETH
In an immediate and sharp reaction, Japanese government bond yields (JGBs) saw a massive vertical jump at the moment the details of the trade agreement between the United States and Japan were announced.
What does this chart tell us?
Explosion moment: As indicated by the arrow, yields on 10, 30, and 40-year bonds jumped simultaneously and sharply, indicating a strong and unified reaction from the debt market.
Immediate analysis: Why this dramatic rise in yields?
This is the strongest signal so far that investors see this deal as a real catalyst that could awaken the Japanese economy from its long slumber.
Expectations for growth and inflation: Markets are now betting that economic growth and inflation in Japan will rise in the future, making current low yields on bonds unattractive.
End of the zero interest rate era? In other words, investors are selling bonds (which raises their yields) and expect that this deal could force the Bank of Japan to end a historic era of very low interest rates.
This movement in the debt market, considered the most intelligent and cautious market, confirms the positive outlook we have seen in the stock market. The trade agreement engineered by President Trump is viewed not only as a solution to a trade problem but as a pivotal factor that could rewrite the future of the Japanese economy.
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