And Now The Facts About Retail Appetite For Japanese Bonds...

Tyler Durden's picture

One of the more persistent, and pernicious, misconceptions about the unshakable - at least to date - tower that is Japanese debt, all Y1 quadrillion of it, is that there is no need to worry (literally, see prior) because the bulk of it is held by retail, i.e., domestic household, investors and as long as that is the case, nothing can possibly go wrong: after all the Japanese population holds its own debt, and as such is a beneficial creditor to the world's largest sovereign debtor. Alas, as so often happens with conventional wisdom, it just happens to be completely wrong. And while one may be entitled to their own opinions, the facts in this case belong squarely to the Japanese Ministry of Finance. The Japan MOF chart below summarizes the true state of retail appetite for Japanese bonds. In the wise words of Dennis Gartman, the chart is unmistakably headed from the top left to the bottom right, in perfectly obvious terms.

Source: Japanese Ministry of Finance

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prains's picture


Do not feed the pussies

Silver Bug's picture

Stay far far away from bonds in general!

hmmtellmemore's picture

I take it Peter Schiff was unable to make any money on this current US bond bubble due to his political slant?  Not good for an invester, best to leave your politics aside.

Mr Lennon Hendrix's picture

Schiff bet wrong on many fronts over the last year.

Half_A_Billion_Hollow_Points's picture

I'm sure that if they paint and cover the fukushima plant with some Hello Kitty, everything will be fine

Stockmonger's picture

Distribution, bitchez.

Zero Govt's picture

Spot Exit..


Last man out switch the lights off ...another Govt-wrecked economy for the scrapheap.

fonzannoon's picture

Bass (Japan first)

Schiff (U.S first)

Gartman ("The gold bubble has popped") -1 trillion

B-rock's picture

How does retail bet on this mess? Kyle Bass-ish

Everyman's picture

OMG Banzai indeed!  Well done William!

"Please to reamain calm" Bitchez!

Mine Is Bigger's picture

I thought the argument was "held DOMESTICALLY," and not "held by WHAT CLASS OF INVESTORS."  The chart doest not show how much is held by Japanese entities, such as Yucho and Kampo (postal savings and insurance) and Nokyo (agrigultural cooperatives).  After all, Japansse people are famous for keeping most of their financial assets in savings.  Very few individuals invest in government bonds.

patb's picture

well the fukushima evacuees are burning through savings at a frightening rate.

Ampontan's picture

Excellent point, but very few people pay attention to what is actually happening in Japan.

The Japan Post share of the holdings alone accounts for 20%, and that doesn't include other financial institutions, power companies, etc.

Quinvarius's picture

Dennis Gartman has no wise words.

TWSceptic's picture

One of the best contra indicators, just recently he made a prediction of 1400- gold (right before it went up again), you can basically interchange his appearances with a big BUY GOLD sign.

RhoneGSM's picture


If you think yen is finally ready to break YCS is double short ETF.  JGBS is short JGB.  Could take awhile to work.

Popo's picture

Dangerous play.  The chances are good that Dipshit Bernanke will buy the bonds from the BoJ.  You'll lose your shirt.   In his mind it's totally justifiable to bail out other central banks in the name of "stability".


bania's picture

"wise" and "Gartman" in the same sentence. Tyler your grammar checker is broken.

Zero Govt's picture

Land of the Rising Sun soon to be the land of the Setting Sun

..especially when you tee-up a nuclear plant in Tsunami Alley


lordchimp253's picture

Japan has $1 trillion in US debt.

When they get into serious trouble, they will sell it and buy Yen.

Japan will be one of the last dominoes to fall.


hmmtellmemore's picture

How exactly does one sell $1 trillion in paper, and who would the the biggest buyer?

Motorhead's picture

All right, where are the Kitlers?!?

Gloomy's picture


   Who is buying the difference?

magpie's picture

Oh, to behold central banks pricing out each other.

Zero Govt's picture

Central Bwankers have one overwhelming priority to debauch their currency, to bailout the dead-broke stupid Govt (their boss) and prop-up the status quo of the major, equally dead-broke stupid, retail bwankers

whatever international ramifications of their policies are are close to irrelevant

just as Judges rarely rule against Govt you'll rarely if ever find a central bwanker that isn't also a crone to the system, they like to keep their jobs afterall.

So we have a central banking system that compounds stupidity (compounds politicians debt-spending mistakes and bankers gambling errors) error ontop of error and then craps it out like a muckspreader right across the nation through currency transmission

Govt : the most ignorant and inept institution in history 

GreatUncle's picture

Japan "was" doing alright :-) able to rack up a humungous debt even though to all intents and purposes its banking system had collapsed because the rest of the world nations were still functioning.

Now look at it ... don't look so good now if anything Japan gone bust a decade ago would have weathered the storm and now be in a position to support the next one.

Somebody has to go bust, you just don't want them all to go bust at the same time.

bilejones's picture

So,  Short the Yen.

The question is, against what?

All we've got is gold.