The shift in the Bank of Japan’s bond purchases from long towards short maturities has helped to lift very long-term yields from their recent lows. And if US Treasury yields rise further next year, the yield curve should continue to steepen which would support the profitability of banks, pension funds and insurance companies. Meanwhile, the trade deal finalised with the US this week doesn’t explicitly prevent the US from imposing additional tariffs on Japanese cars, but we still think it has averted that threat for now.
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