For every 10 basis-point “idiosyncratic JGB shock,” yields on the U.S., German, and U.K. bonds could rise by two to three points, Goldman strategists said.
U.S. bond markets may likely see some ripple effects emerging from faraway Japan following the weekend’s political developments. Japan’s ruling Liberal Democratic Party elected Sanae Takaichi as its new leader, making her the first woman to head the party — and potentially the country’s first female prime minister.
Given Takaichi’s credentials as a pro-stimulus leader, the yen weakened above the 150 level against the dollar for the first time in two months, and the yield on the 10-year Japanese Government Bond (JGB) climbed to a 17-year high. Goldman Sachs analysts expect the overseas bond markets to move higher in tandem, according to a Bloomberg report.
In a note published on Oct. 5, Goldman Sachs strategists, led by Bill Zu, said for every 10 basis-point…
