JGB Futures Halted (Again) For Biggest 2-Day Plunge Since Lehman; 5Y Yields Hit 13 Month Highs

Tyler Durden's picture

Another night; another Japanese government bond futures halt. The last 2 days have seen JGB prices plunge at the fastest rate since the post-Lehman debacles in Sept/Oct 2008 smashing back to 13 month highs. 5Y yields are surging even more - trading above 34bps now (up from 9.9bps on March 5th). These are simply astronomical moves in the context of JGB history and strongly suggest Abe & Kuroda are anything but in control of the quadrillion Yen domestic bond market as they jawbone inflation expectations into the psychology of the people. Of course, the Nikkei is surging (now up 9% in the last 5 days alone) amid JPY breaking above 102 (but for now it has rallied back to 101.80). Japnese interest rate implied volatility is surging once again also (after its epic collapse last week - which appears the worst-timed lifting of hedges ever, or more like a lifting of hedges into an unwind of actual long positions).

The last 2 days (since JPY broke 100) have been tempestuous at best!!


with 10Y JGB Futures prices seeing their biggest 2-day selloff since Lehman...


and 5Y Yields smashing higher to 13 month highs at the fastest rate in 30 months...


as JPY goes from weakness to weakness...


and Japanese interest rate vol is rising rapidly once again (which will likely put pressure on banks to reduce risk budgets or unwind positions markedly)...


Charts: Bloomberg

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electricgorilla's picture

Where's John Law.....err...I mean Kuroda...get those printing presses oiled and fired up quick before SHTF....



takeaction's picture

I hope this guy is wrong....but it SHTF...here is the warning.

Also...please take the time to watch this....



DollarMenu's picture

Thanks for the video link TA.

Good info, well presennted.

bdub2's picture

Whether or not any/all of these events are adding up to, at long last, some truth in this cluster-f, Bernanke Pimpin' economic viral swill of a market, I relish in the 'coincidental' slow boiling rot of CNBS right along with it all. Way in the distance, poetic justice may be forming...wayyy in the distance.

smlbizman's picture

halt......hammer time.......

SWRichmond's picture

Wait...do you mean to say that a central bank threatening, and then making good on the threat, to print a currency into oblivion will cause interest rates to rise, and cause losses in its sovereign bond market?


Has anyone told Bernanke?

Headbanger's picture

Looks like it's finally starting to sink into his thick head from seeing this spike in JGB yileds.

And thus we are now starting to hear rumblings about tapering off on QE

The music is stopping!  So put on your (ballistic) helmet, load em up and fasten your seat belt!

GetZeeGold's picture



When we put out the QE stopping rumors.......buy gold like a mother......and service the printers for the next round.


We're all anti-American globalists now......


hangemhigh's picture


Looks like it's finally starting to sink into his thick head from seeing this spike in JGB yileds.....And thus we are now starting to hear rumblings about tapering off on QE... The music is stopping!

According to a recent article:

"Japanese investors seem to be starting to buy foreign bonds gradually," said Yunosuke Ikeda, the head of foreign-exchange strategy at Nomura Securities Co. in Tokyo. "With U.S. yields likely to rise, the market is tilted toward dollar strength as the view is taking hold that an end to quantitative easing will be discussed sometime this year."


This quote explains/confirms the strategy and reasoning behind both Abenomics and the recent rounds of Fed/Hilsenrath inspired anal leakage intended to move markets.   A deluded dog and pony that foreshadows another round of dark side looting, Abenomics is actually designed to serve hidden masters.  


First, by providing a timely wave of new money, it functions as buy side protection for US equity markets during the predictable seasonal sell off, Mar thru May, which has occurred every year since QE began in 2009.


That Mar-May selling just happens to coincide with the temporary removal of market liquidity caused by Japanese corporations’ repatriation of funds at the end of their fiscal year.  This year, Abenomics replaced that liquidity before it was removed, and by functioning, as a front running positioning system, served as a ponzi wind sock for the massive amounts of fiat being placed in the hands of global traders.     


Abenomics other, and probably much larger purpose, is to provide distraught but willing buyers if/when Bernankenstein needs foreign, safe haven purchasers, to unload some of the worthless paper on the Fed’s balance sheet.   


Japan is an at risk, irradiated, basket case being primed for some serious imperial bitch slapping.   The QE/Abenomics parlay is an unmisstakeable ‘tell’…it is trauma ridden Thelma and Louise style economics……..dysfunctional, distorted and global in scale. 


Another massive ‘invisible hands’ payday for the leveraged predator banks and their running dog hedge fund allies is right around the corner…..as JGB volatility spikes and the dollar moves higher, gold and commodities will probably move lower .....those debt/currency  tectonics will create imminently tradable shock waves for those who traffic in pestilent slops from the plunderbunds banquet table………………..


Robsabi's picture

Having read the link. All I can say is "Oh please, don't be such an idiot." There are enough actual things to worry about without wasting time on this idiocy. Bengahzi stinks, but it's not an event "many times more explosive than Watergate". Not even close. This is just another example of immediacy bias. Pro-tip: don't take your cues from a site that promotes such shite as "stabilized liquid oxygen".

Snoopy the Economist's picture

"Bengahzi stinks, but it's not an event "many times more explosive than Watergate". Not even close."


Ummm, yes it is. Watergate was a third rate robbery while Benghazi was a cover up of the death of 4 Americans - one an ambassador. Perhaps you are so desensitized to murder there is no difference in your little mind.

MisterMousePotato's picture

I gave you an up arrow, but even you understate the significance of Benghazi. To be sure, there was a cover up, but the real problem, IMHO, is that the Obama administration allowed, or facilitated, or perhaps even orchestrated the attack on the compound and the death of Christopher Stephens. Whether they wanted Mr. Stephens dead specifically (to cover up some other atrocity [arms running, whatever]) or if it was just generally intended to send the message that one could attack American interests overseas and kill Americans (including Ambassadors) with impunity, well, again, who knows? (My money, FWIW, is on the former.)

Now, if the point of the original poster was that it will not matter to a Democrat voter or the Democrat machine if Barak Obama personally shoved a hand grenade up Ambassador Stephen's ass, well, he probably has a point. It is possible that a Democrat voter could be concerned that something like this might affect their grotesquely excessive salaries, perks, benefits, and pensions or cause the supply of Obama phones to dwindle, or something else that is really important, but, otherwise? No fucking way. So, he might be right. The Democrats don't give a shit. The media and courts will do everything and anything to cover. Most Amerircans, Republican or Democrat are too fucking stupid and ignorant. And what're the Republicans going to do? Hm? You got Mitch McConnell (*spit*) running around screaming, "Somebody should do something!"

(Uh, Mitch ... you useless, worthless, pathetic piece of shit ...)

Kayman's picture


Nothing like the smell of fresh troll first thing in the morning.  The only thing ABC's smarmy Brian didn't do during his election interview with the Big O, was slip him the tongue.  Now they propose to do "investigative" reporting ?

Buck Johnson's picture

Also with talk of taking away the QE punch bowl something may be in the works.

MajorWoody's picture

What kind of "ambassador" hangs around a civil war? Oh... that kind of ambassador, starts with a C, ends with an A.

Anyway, back to the matter at hand chums...the yen, remember the yen?

Who wants to place bets on when the yen gets to 110 to the Yankee buck?

I say 110 by November.

Kayman's picture

The China peg is the target. The game is behind the curtains.

Burt Gummer's picture

What's the Over/Under how many days before USD/JPY hits 200?


I'll start the odds at 120 days with the Over at -150 and the Under at +155.



Vendrell's picture

ill take under for 1 btc laying

MajorWoody's picture

Just missed your post, now that's a gambler.

slaughterer's picture

With such JGB vol., gold will be dumped by Japan for margin purposes, taking gold under $1400 again.  

Room 101's picture

Yep, I reckon a bit of a drop in the prices today.  Already at $1428.  Under $1400 possible today. Another smackdown cometh, although I don't think it'll be as big as the Ides of April. 

fonzannoon's picture

Funny I thought Japan did not really own any gold, but the inflation that is starting to happen because of the weak Yen is causin their citizens to start buying physical.

GCT's picture

Let them smack it down all they like.  I love buying these take downs for physical only.

slaughterer's picture

FOMC Schedule:

Monday, May 13, 2013  No Pomo

Village Smithy's picture

But there's always the Kevin Henry back-up plan. Hope he's stuck in traffic.

taniquetil's picture

Krugman already getting an article ready for the morning.

lolmao500's picture

That the market is halted is fucking ridiculous... free market, WHERE IS IT???

When gold and silver crash, nothing is fucking halted! Why would it be different for junk bonds of a bankrupt country??


Well said, but I think your question is rhetorical in nature. 

Arius's picture

the crash of gold and silver does not pose a systemic risk issue, therefore, there is no interference by the authorities.  this case is rather different, wouldnt you agree?

e-recep's picture

"free market"?? what is a "free market"?

chindit13's picture

Japan has rules regarding market stoppages, and have had them for at least twenty-five years.  They have them in all futures, and even in individual equities.  Generally what happens when there is a buy or sell imbalance, they hold the price at a particular level and wait to see if buy and sell orders match.  If they do not, after a set time period, and depending on the absolute level of the underlying instrument, they move a set amount to a new level, once again waiting to see if buy and sell orders can match.  They repeat the process until the market can be cleared.

The system is automatic.  If you are watching real time, you can see it developing, guess that a halt will come, and position accordingly.

OneTinSoldier66's picture

Talk like that might get John Boehner to start crying again.

maskone909's picture

my JGBD will run hard tomorrow!!!

infiniti's picture

Me too! Only problem with it is that the daily gains are capped by the trading halts.

q99x2's picture

Look out here they come. Get those cameras focused up to the top floors.

All I know is that it costs less money this week to transfer money from Mt. Gox than it did three weeks ago.

Caviar Emptor's picture

They proved that deficits don't matter. Now they are proving that debt doesn't matter. In the end, they'll prove that currency doesn't matter either.

Apostate2's picture

I could not say it better. Kudos. 


eclectic syncretist's picture

I just plotted the ^N225 vs the ^TNX going back to 1998.  Very interesting!  Is there some sort of tectonic shift going on, or is the ^TNX about to explode upwards?

Bunga Bunga's picture

HALT, Oder Es Wird Scharf Geschossen!

Kreditanstalt's picture

The idiot government & Kuroda + Abe richly deserve this.  Unfortunately, the beneficiaries will be a bunch of leveraged-using-Fed-liquidity speculating banks and hedge funds...

Offthebeach's picture

I smell squid. Large,old, tons of rotted flesh hanging from a huge, yellow, chipped beak, squid.

It's here, just beneath the surface. And, it hungers.

Quonk's picture

Three-way death match: Japan, the Squid, and China.

WTFUD's picture

Cameras, electronics in freefall. Car sales dwindling. Contaminated eco system, food chain affecting human & animals & plants; energy imports soaring+ japan futures duh

LetThemEatRand's picture

Bi the Dip.  And by the Dip, I mean Krugman.  Fuck.  You.   Bernanke.