The New CS Board

[jumanji0881]

The next financial crisis ? -

My Comment: Not mentioned in this article is that with the Yen falling, it increases inflation since Japan imports so much oil.

Bond Meltdown's Next Driver Is BOJ Policy Implosion
https://www.zerohedge.com/markets/bond-meltdowns-next-driver-boj-policy-implosion

Excerpt:
There may be no good choices left for Japan’s central bank. If it sticks to its guns it risks further yen declines, adding to rampant dollar strength that is a key pain point for numerous currencies, markets and economies worldwide. The BOJ would also likely end up holding more than half of all JGBs to make dysfunction the norm in one of the developed world’s second- largest bond markets.

But a shift away from curve control would bring its own dangers by turning JGBs from an island of stable returns into yet another bond meltdown. That would be especially cruel for private holders of the debt after curve control saw JGBs miss out on the massive gains Treasuries experienced amid pandemic stimulus.

Japan’s insurers hold about 20% of the country’s 1.2 quadrillion yen ($9 trillion) government bond market, so the potential for severe value-at-risk shocks is massive -- this in a market that still shudders at the memories of the 2003 VaR meltdown.

The last thing bruised global markets need is for some of the managers holding Japan’s $1.2 trillion of Treasuries to need to liquidate some of their assets to cover losses.