Japanese Government Bonds Halted Limit Down; Yields Spike To 10 Week High; Worst Day In 5 Years

Tyler Durden's picture

It appears things are getting a little out of control around the world. Between the collapse in JGB implied volatilities in recent days, today's melt-down in JPY (+255 pips from pre-open US levels), the last few days melt-up in the Nikkei (+6.8% in 3 days), and now the quadrillion Yen Japanese government bond market is halted limit down as yields smash higher by 11bps to 70bps in 10Y - the highest yield since mid-February. For context, this is the worst day in JGBs in five years (and 5Y yields are back near 13 month highs). So much for controlling the domestic bond market while ratcheting up inflation expectations - remember what happens as Japan's cost of debt rises! And just to add some more fun, Japan's economy watchers see the current economic climate dropping for the first time in six months (and household expectations also fell for the first time in six months).


JGB Futures halted limit down...(from 12:39 Tokyo to 12:50) due to rapid price moves... exaggerated soon after the BoJ's buyback efforts on JPY130bn


Yields jump their most in 5 years...


To 10 week highs in 10Y...


and near 13 month highs in 5Y...


2% inflation or bust! or maybe 2% inflation and bust

Japanese Econ Watchers Current Index turns down for first time in six months...


Charts: Bloomberg

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DoChenRollingBearing's picture

Mmm, mmm, mmm!!

Yummy Japanese bearings getting cheaper by the day!

kaiserhoff's picture


Why do I think Comrade Ben has a knot in his panties this morning?

Mr. Market pissing on your birthday cake, Benny?

malikai's picture

It'll probably be pricing 144-145 again next week.

Nevertheless, that was one hell of a gap-down.

If you were short Thursday night, you retired this morning.

NoDebt's picture

If I recall previous articles, weren't rising bond rates the indication that Japan may have reached the point of not being able to print their way out of this?  No matter how much you print, rising interest expense always exceeds it?

This shit is mind-numbing.  It's like the weird things that happen when you get too close to a black hole.

New World Chaos's picture

Is this what it's like to be a sheeple?  Your orbit is stable until it's not.  You cross the event horizon long before your Ivy League navigator admits something is wrong with his perfect Newtonian calculations.  This is the boundary of inevitable doom, but you do not feel any jolt as you cross it.  Only a vague sense of unease.  Darkness looms up on all sides and you look at the outside world with tunnel vision.  It seems time is accelerating out there.  You realize you are being simultaneously stretched and squeezed from all sides.  Within minutes you are hamburger.  A slightly more bloated monster is the only evidence you ever existed.  You have not satiated it- that's impossible.  You only made it hungrier...

M2Market's picture

Nodebt you're right on.  The Japan ship has cross the event horizon and we shall witness this one doom in due time.  their monetization reduced its debt load in arithmetically, while the interest cost compounds exponentially, multiply by the currency devaluations.  The Japanese equities investors might have a surprise for them in store. 

Panafrican Funktron Robot's picture

If they refocused their buying scheme to purely domestic assets (esp. JGB's), they could very easily reverse this trend a la Fed.  The fact that they're not doing this, and instead buying mostly foreign assets, is at least initially pretty confusing.  

WhiteNight123129's picture

I do not recall if I wrote that before but just in Case.


Gringo Viejo's picture

You can spend all your time makin' money
You can spend all your love makin' time
If it all fell to pieces tomorrow..........
Take it to the limit ichiban time.................

slaughterer's picture

Expect PMs to get sold while the Japanese bond bulls raise money for their margin calls.  

hungrydweller's picture

Yeah - out of control.  Equity futures still UP Up Up!!!  Maybe they will fall later.

Cdad's picture

Ummm...equities can try to pretend the Japanese bond market doesn't matter...but...errrrr...there's some pretty obvious and serious math that would suggest otherwise. 

Debugas's picture

does your math include risks calculation ?

GetZeeGold's picture



They just printed trillions.....it's not like they don't have any money.

machineh's picture

In U.S. historical data, it's not till bond yields rise above 5% or so that they become a drag on equities.

Japanese yields have risen to a crushing rate of ... 0.7%.

No reason, in other words, that Japanese stocks and yields can't crank higher together for awhile.

malikai's picture

I keep hearing about this math stuff, but the people on TV never tell me what it is.

Can you tell me? Where I can find this math stuff?


Ignatius's picture

Do not worry.  I have it from good sources that the very finest minds in the world are available and working at this very moment on this very problem, and even Tyler is up late (to post early) the news as it breaks.

Go fishing.

nomorebuyins's picture

Nikkei looks cheap now, until it doesn't. SSSSlide soon!

maskone909's picture

Got my tickets homie 10k worth

UP Forester's picture

Danger Will Robinson, Danger!

Big Beta Bill's picture

UP Forester?  I went to Michigan Tech.  Heard a program on npr tonight about a wolf season....seems their population is doing quite well.  

Colonel Klink's picture

Wolf population is exploding on Wall street and in DC too!

GetZeeGold's picture



Dammit....I walk out of the room for like 2 seconds.....and all hell breaks loose.


This crap wouldn't happen if we had gun control, immigration reform, and better suppression of the Benghazi terrorist attacks.

kchrisc's picture

There's a hole in the bucket, dear Liza, dear Liza,
There's a hole in the bucket, dear Liza, a hole.
Then mend it, dear Henry, dear Henry, dear Henry,
Then mend it, dear Henry, dear Henry, mend it...


Colonel Klink's picture

There's a hore in the bucket, deal Riza, deal Riza,
There's a hore in the bucket, deal Riza, a hore.
Then mend it, deal Henly, deal Henly, deal Henly,
Then mend it, deal Henly, deal Henly, mend it...



Fixed it for you!

kaiserhoff's picture

Ya'll are touched in the head.

God, I love this place.

GetZeeGold's picture



Get moar buckets......the printers are spitting out paper at a staggering rate.

kchrisc's picture

Oh shit that's funny! Thanks for the morning laugh.           hujel

kchrisc's picture

Looks like we know where the house-of-cards wrecking sneeze is going to come from.

Going to be fun watching the Berstank try to catch this knife. hujel

AbbeBrel's picture

Watch out Mrs. Watanabe!    That steamroller is getting mighty close to your kimono!!   Remember the first rule of Ponzi finance - the first to run away wins, and the last one to react is the one who gets flattened.   It is a slow motion and painful thing to watch / experience in this case.

q99x2's picture

How you like me now. What's up Bernanke. You knew me when you blew me.

chindit13's picture

Not really much of a move yet, as the JGB decline is less than one percent (one handle on a 144.60 start), and the yield has only moved up a few angstrom (Japan paper no longer has pips.) The yen is of much more significance, at least right now.  With the lack of domestic funding ability (save for the BoJ buying), Japan is not going to be able to entice many more foreigners to "diversify" into Japan paper when the currency is evaporating.  The world is 33% more expensive for Japanese than it was six months ago.  No wonder they scoffed up any Ferrari or Lambo on the lot.

Also keep an eye on the Aussie.  It's not Japan related, but it is furtively sneaking back down to dollar parity.  And guess which favorite hedge fund trading, liberal cause-funding Hungarian is short (to go along with his yen short)?

TheSilverJournal's picture

Japan is soon to become the top holder of US debt. They can easily slow down their purchases of Treasuries so they don't create as many Yen. This is ultimately very bad for the US debt markets.

Spitzer's picture

Its funny how the world just pretends that the Fed insn't there on the graph when you pull up the chart of biggest US debt holders.

That long term chart with this move looks kinda sketchy to me. Definitly worth a report.

Anyone saying that Tylers are jumping the gun on this are numb. It may turn out to be nothing but ....who TF knows.



More_sellers_than_buyers's picture

Why is that bad? Benny boy will take any balance for sale? Nothing is bad! Buy the Dip

jcaz's picture

Japan hasn't been driving the bus for awhile now, and are losing what control they had-  they just can't admit they're being gamed.....

kchrisc's picture

Let me get this straight: Japan is up to their eyebrows in debt, over 250% of GDP, AND the debt of the US as well.

They're some kind of debt kamikazes.             hujel

Mentaliusanything's picture

George is one smart shark.... He like a shark smells blood

GetZeeGold's picture



Did he get promoted from being a snake?

MythicalFish's picture

Let's see whether it does anything to GOLD this time.

NoDebt's picture

I suspect it's doing a lot of good for gold VALUED IN YEN.

John___Connor's picture

When JGB's become worthless the money backed up by JGBs become worthless. That money is JPY. In a debt-standard money system when the debt backing up the money goes bad, the money as well goes bad. This is the equivalent of money supply deflation. In a money supply deflation scenario denationalized money such as gold, silver and bitcoin are the best money solutions to protect yourself given their limited counter party risk exposures. Knowmadic Life did a great article on the counter party risks of the major money alteratives and how they would be expected to protect you in times of inflation and deflation. A great read!


Surrealist's picture

There's life Abe but not as we know it, not as we know it, not as we know it

There's life Abe but not as we know it, not as we know it, Japan!


TNTARG's picture

Talking about Japan:

Hospital Official in Fukushima: “Extremely scary data” — Stroke rate spiking in people ages 35 to 64 — 3.4 times higher than before



May 8, 2013 at 7:11 pm Log in to Reply

the japanese government have known all this all along

heres what its doing to the animals and environment! what happened to all those studies on wildlife? a bit slow arent they? peer reviewed or corporate owned?


A terrible silent tragedy is happening in Fukushima! The lone horseman of Itate speaks out!

“I would like to welcome anybody who is concerned to contact me. I request vets and radiation specialists to come and investigate my horses.”





and while we are on the subject of censorship..


Non Passaran's picture

You're the Fukushima of ZH. Fuck off, spammer.
And while I'm at it - fuck GW and fuck BB.

TNTARG's picture


Ain't gonna go away just because you don't want to acknowledge what is happening.

Also, I don't recognize you the right to "fuck off" me, moron.