2min chapter

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How Would the Bank of Japan Destroy Global Markets and Roil Central Banks?

Market Depth

CHAPTER

The Risks of Volatility Explosion in the Global Bond Market

March saw the largest foreign buying of JGBs on record and second largest buying of foreign bonds by Japanese on record. The B.O.J. caused a massive short squeeze and a directional bid of buying for bonds, a collapse in yields. In other words, yields cliff diving at an incredibly violent pace. There are serious structural problems with trading and market liquidity and market mechanics in the sovereign bond markets currently.

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