It appears
things are getting a little out of control
around the world. Between the collapse in JGB implied volatilities in
recent days, today's melt-down in JPY (+255 pips from pre-open US
levels), the last few days melt-up in the Nikkei (+6.8% in 3 days), and
now the quadrillion Yen Japanese government bond market is halted limit
down as yields smash higher by 11bps to 70bps in 10Y - the highest yield
since mid-February. For context,
this is the worst day in JGBs in five years
(and 5Y yields are back near 13 month highs). So much for controlling
the domestic bond market while ratcheting up inflation expectations -
remember what happens as Japan's cost of debt rises! And just to add
some more fun, Japan's economy watchers see the current economic climate
dropping for the first time in six months (and
household expectations also fell for the first time in six months).
JGB Futures halted limit down...(from 12:39 Tokyo to 12:50) due to
rapid price moves... exaggerated soon after the BoJ's buyback efforts on
JPY130bn
Yields jump their most in 5 years...
To 10 week highs in 10Y...
and near 13 month highs in 5Y...
2% inflation or bust! or maybe 2% inflation and bust
Japanese Econ Watchers Current Index turns down for first time in six months...
Charts: Bloomberg
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