Credit Agricole CIB says valuations on Japanese bond duration are becoming 'very
attractive', but continued expansionary fiscal policy is keeping investors
sidelined. The firm says a more hawkish Bank of Japan could lift inflation
expectations and trigger a market rebound. While inflation has eased materially
from policy measures, Credit Agricole CIB views this as unlikely to convince
investors the BOJ is no longer perceived as behind the curve. The firm expects
the Bank of Japan to raise rates again in October to counter yen weakness.
