Global Value Investing

[tenenbaum]

Bass's reply would be that given the demographics in Japan, the supply of potential purchasers of the debt is dwindling and given the Japanese govt's level of debt servicing, it can't afford any increase in interest rates. At some point, the BOJ will have to monetize in order to support the market which would be negative for the Yen and therefore also the JGB. I agree the trade has been a widowmaker over the years, but that doesn't mean it won't eventually break down spectacularly when it hits the tipping point. The timing of which is certainly problematic, though.

"People like J. Kyle Bass have been calling for a short on JGB for years, and they've been getting their faces ripped off."

I'm not sure if that makes it a bad trade necessarily.