Invesco Analyst Warns of Potential Impact on Japanese Bonds Following Prime Minister's Victory

Invesco Asia-Pacific Global Market Strategist David Chao has highlighted potential upward pressure on long-term Japanese government bond yields following the overwhelming victory of Japan's Prime Minister Sanae Takaichi. According to Jin10, Chao noted that increased fiscal spending could elevate fiscal and inflation risks. From the yen's perspective, short-term fluctuations may occur as the market assesses the impact of the Liberal Democratic Party's victory on currency dynamics. Chao added that with the Federal Reserve maintaining its current stance and the Bank of Japan not expected to raise rates until the second quarter, the USD/JPY exchange rate might approach the 160.00 level again.