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Another Day, Another Japanese Bond Market Halt

Submitted by Tyler Durden on 04/10/2013 09:34 -0400

For the fourth day in a row, Japanese bond futures markets were halted due to significant (and rapid) price movements. Three of the four halts have been on downside shifts (with the upside surge driven by the BoJ's first attempt at monetization). The daily ranges in longer-dated JGBs are incredible and certainly the last word one would use to describe the quadrillion Yen Japanese bond market since the BoJ's announcement is 'orderly'. As Kyle Bass noted, the volatility in JGBs will be the gauge of the market's qualitative perception that Abenomics can succeed; for now it appears, with longer-dated JGB yields at pre-BoJ levels, having exploded 30-40bps off the lows, and short-dated JGB yields soaring to 11-month highs, things look a little out of control.

Halts...

Dis-orderly...

Losing control...

Charts: Bloomberg

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Wed, 04/10/2013 - 09:37 | 3430748 Cognitive Dissonance

Tyler, could you please add some snazzy background music to these charts?

<Would the ZH peanut gallery care to make some suggestions?>

Wed, 04/10/2013 - 09:44 | 3430803 Say What Again

And to think I was going to take the day off today.

What moar can happen today?

Wed, 04/10/2013 - 09:49 | 3430827 Cognitive Dissonance

There are no days off in Bizzaro world, just brief lulls in the escalating insanity.

Wed, 04/10/2013 - 10:00 | 3430904 GetZeeGold

When the inmates in the asylum start acting responsibly......we shall proceed.

Until then....we're on lock-down.

Wed, 04/10/2013 - 10:41 | 3431159 MayIMommaDogFac...

MayIMommaDogFace2theBananaPatch's picture

just brief lulls in the escalating insanity

He said, "LULZ"...

Wed, 04/10/2013 - 16:24 | 3433422 BTFDemocracy

Here's a button to push once JGB interest overtakes tax revenue.

http://inception.davepedu.com/

Thu, 04/11/2013 - 14:04 | 3437377 papaclop

You could learn how to spell more. As far as I know, there is no such word as moar

Wed, 04/10/2013 - 09:52 | 3430859 mick_richfield

OK, CD, I'm here for you.

I'm thinking of a movie scene kind of like the end of Apocalypse Now, except instead of helicopters blowing up the jungle temple, I have graceful, semi-slow-motion shots of Godzilla destroying Tokyo.

The swan-song music soundtrack is the Un Bel Di aria, from Madame Butterfly.

Wed, 04/10/2013 - 10:39 | 3431150 CrazyCooter

Hah, I was picturing a bonzia shop of kilgore when he was squatted down say "I love the smell of NaN Sigma in the morning. Smells like ... vic'try" with the BOJ ministers head photoshopped on there.

Regards,

Cooter

Wed, 04/10/2013 - 10:43 | 3431196 MayIMommaDogFac...

NaN Sigma

Is that a JS reference or are you talking about the flatbread you had at that Indian restaurant last night?

Funny either way.

Wed, 04/10/2013 - 09:53 | 3430863 CheapBastard

Captain Doyle: "Hey, Scotty, can you get this machine to work?"

Scotty: "I'm givin' her all she's got, Captain! If I push it any harder the whole thing will blow!" ...

Wed, 04/10/2013 - 10:02 | 3430921 EscapeKey

2 Unlimited's "No Limit" seems appropriate from where I sit.

Wed, 04/10/2013 - 10:09 | 3430959 StychoKiller

"Everybody's got somethin' to hide, 'cept for me and my monkey" --

Beatles

Wed, 04/10/2013 - 10:08 | 3430962 fuu

Why Do We Build the Wall(Hadestown) - Anais Mitchell

I My Me Mine - Polysics

Wed, 04/10/2013 - 10:40 | 3431118 LeisureSmith

Drink'n that boose! http://www.youtube.com/watch?v=qJ4yrbJ6LCA&feature=related

Or this from the same group http://www.youtube.com/watch?v=_u1t4kUIwdo

I think it fits with this kamikaze/seppuku style monetary policy.

Wed, 04/10/2013 - 10:37 | 3431139 CrazyCooter

Detonation Boulevard?

Regards,

Cooter

Wed, 04/10/2013 - 11:46 | 3431622 Cognitive Dissonance

Nice!

Or how about "More" by the same group?

"Some people get by
With a little understanding
Some people get by
With a whole lot more
I don't know
Why you gotta be so undemanding
One thing I know
I want more
I want more"

Wed, 04/10/2013 - 11:52 | 3431685 prains

<Would the ZH peanut gallery care to make some suggestions?>

Maths _Deadmau5

Wed, 04/10/2013 - 09:41 | 3430769 fonzannoon

They have lost control of their 5yr yields at .25bps. Is it me or have we all gone completely fucking insane.

They are like 250% debt to gdp. They have no way out of this and their 5yr yield is .25%.

Fucking bizarro.

Wed, 04/10/2013 - 10:00 | 3430896 EscapeKey

people are dumping their JBGs in droves and buying bitcoin it would appear!

Wed, 04/10/2013 - 09:40 | 3430772 semperfi

Capital Controls, Japanese style.

Wed, 04/10/2013 - 09:46 | 3430790 pashley1411

What is Japanese for "you boughtz it, you ownz it"? Maybe we can redesignate them "tarbaby bonds"; get in, can't get out.

Wed, 04/10/2013 - 09:47 | 3430817 Sudden Debt

You sure that aren't radiation levels in Tokyo?

Wed, 04/10/2013 - 10:02 | 3430908 mick_richfield

Excellent.

We can define a new unit called Buckerels, which measures the decay rate of real wealth caused by government money-pollution.

Units are spontaneous combustions per second per million honest citizens.

Wed, 04/10/2013 - 09:51 | 3430845 ApollyonDestroy

Fuck you Bernanke!

Wed, 04/10/2013 - 10:00 | 3430901 EscapeKey

"I'll take capital markets for $1,000,000, Alex."

Wed, 04/10/2013 - 10:00 | 3430864 Dr. Engali

It seems that Bill Gross loves him some U.S treasuries now....

http://finance.yahoo.com/news/pimcos-gross-turns-bullish-us-100107348.html

A little late to the game there Bill....I know, I know...you're trying to get back into the club.

Wed, 04/10/2013 - 09:56 | 3430867 bustdrs

Got a quote two weeks ago to change tyres back to normal from snow in Nagoya city, Japan.

Yesterday, drove car in for tyre change to be informed that the price had risen by ¥400 per tyre because of anticipated rising "costs". Energy, Food, stock market.....

Classic. Laughed at the time. Turned to unhappiness whilst trying to fill the same order at an orderly price in required time frame.

The worst part of this story is going to the most expensive city in the world tomorrow, Perth, Australia.

They don't even appologise for price increases and there is no point looking for something cheaper. AUD5500 a square meter bitchez!

1.5m people, 1hr time gap to prosperity. No escape.

Edited for no recognition of Jap text.

Wed, 04/10/2013 - 10:02 | 3430909 EscapeKey

The Government statistics bureau has decided that new tyres are worth 1.85 old tyres. So technically, you come out ahead.

Wed, 04/10/2013 - 10:17 | 3431024 morning_glory

We all lead hedonistic lifestyles now!

Why just tonight I am spoiling myself with a tasty horsemeat burger!

Wed, 04/10/2013 - 10:45 | 3431202 CrazyCooter

Whoa, whoa, whoa! I got a hedonic lifestyle. Where do I lodge a complaint?

Regards,

Cooter

Wed, 04/10/2013 - 10:38 | 3431141 bustdrs

Feelin better, thanks, no one else seems in japan seems to care, their just so proud the stock markets going up and their on their way back!

Wed, 04/10/2013 - 11:48 | 3431663 ATM

I'm proud that I bought that short Japanese bond ETF a few weeks ago. (JGBS)

The Japanese will realize when it is too late that there is a difference between real and nominal returns.

Wed, 04/10/2013 - 09:58 | 3430895 johngaltinvestments

100 or bust. I'm not sleeping til it happens.

Wed, 04/10/2013 - 11:49 | 3431666 ATM

Shit, 200 or bust would be a goal. 100 is simply a rounding error now.

Wed, 04/10/2013 - 10:19 | 3431029 survivorist

Could some one explain why the announcement has had this impact on bond markets I'm struggling to see the correlation, I appreciate the basics of pumping trillions of yen into the markets but why does yield shoot up and futures crash and what does this mean for Japan, what are the negatives of this? Thanks guys.

Wed, 04/10/2013 - 10:29 | 3431094 AlphaDawg

The value of the bonds decreases due to yen devaluation

JGB value down means yield up

Japan, at 250 debt to GDP and already paying 30% of tax rev on interest cannot afford for the yields to go up

Wed, 04/10/2013 - 10:34 | 3431119 Schmuck Raker

"Dear Investor, please do not worry."

Wed, 04/10/2013 - 10:47 | 3431219 ok

Long JGBS

Wed, 04/10/2013 - 11:50 | 3431670 ATM

wish I had gone longer but I pussed out.

Wed, 04/10/2013 - 15:47 | 3433178 WhiteNight123129

Short the Bond market not when the money is printed but when it stops being printed.

The BOJ will either have hyperinflation or stop printing because thye manage to create the desired level of inflation. We are just at the beginning of the printing. Be patient and wait. You can short the currency in the meantime and then cover teh currency short and short the bonds themselves.

Another Day, Another Japanese Bond Market Halt

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