The New CS Board

[jumanji0881]

"That Would Be Crossing The Rubicon": The BoJ Is About To Own More Than Half Of All JGBs
https://www.zerohedge.com/markets/would-be-crossing-rubicon-boj-about-own-more-half-all-jgbs

My Comment: So how does this end ? Japan has huge sovereign debt relative to GDP (over 200%, I think). If rates increase on that pile of debt it could be devastating. If the BOJ keeps printing and buying JGBs, then the Yen would drop precipitously and inflation becomes uncontrollable. Lots of luck on those inflation resilient equites as the global economy goes into recession.

Excerpt:
The private sector in Japan is already very overweight JGBs and underweight equities. Inflation has recently surged to a 10-year high, and further falls in the yen promise to pressure inflation yet higher. Ownership-concentration risks mean that any sign that inflation is getting out of control would likely prompt an exodus from JGBs into to more inflation-resilient equities.

Owning half the JGB market is a potential tipping point that could eventually find the BoJ the sole bag-holder of the world’s third-largest bond market.