JGB basis trade throws off the shackles
Japan’s cash-futures arbitrage on the rise despite Iran volatility and BoJ-driven bond scarcity
The Iran war has made 2026 a year to forget so far for hedge funds trading rates. Curve positions were stopped out in US and Australian dollars, euros and yen as the surging oil price triggered inflation fears.
Japan’s cash-futures basis trade has been a rare bright spot – and as the Bank of Japan (BoJ) proceeds with its quantitative tightening programme, it could free up more of the underlying
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