Forget The VIX: Is Tokyo Where The AI Unwind Breaks Something?

If you were watching the VIX last week, you saw a scare. If you were watching Tokyo, you saw something closer to a fire drill.

According to BofA's Global Financial Stress Index (GFSI), which aggregates 41 risk, skew and flow gauges across equities, rates, credit, FX and commodities, Japan is now the most stressed region in the world "by a wide margin." And the single most stressed gauge in the entire index is an obscure yen funding spread that just posted one of its biggest weekly moves since 2000, ahead of S&P skew, Nikkei vol and everything else.

A Calm Week On Paper, A Wild One Underneath