3min chapter

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The Most Critical Month for Bank of Japan and Market Impact Is Here

Market Depth

CHAPTER

The Risk of Japan Divesting Its Overseas Holdings in the Bond Market

Currently under baggage pan-zield curve control tenor jb's are tapped at 50 basis points. The most indebted country in the world as measured by government debt levels relative to gDP 200% of debt gdp gets to borrow for ten years out at 50 basis point. Bank japan has been the most aggressive buyer of jb's over this last decade such that it now owns more than half of the one quadrillion yet of jgb's outstanding. It's setting a ceiling on the yields for which it hasn't yet acquired meanwhile the risk for ten year u.s treasury yield has been 3% 3 and a half percent 4%.

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