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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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Mon, 05/13/2013 - 01:10 | Link to Comment electricgorilla
electricgorilla's picture

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

 

 

Mon, 05/13/2013 - 01:15 | Link to Comment takeaction
takeaction's picture

I hope this guy is wrong....but it SHTF...here is the warning.
 http://www.naturalnews.com/040286_false_flag_Benghazi_distraction.html

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

 

http://www.youtube.com/watch?v=0ULJ70LzTNc

Mon, 05/13/2013 - 03:01 | Link to Comment DollarMenu
DollarMenu's picture

Thanks for the video link TA.

Good info, well presennted.

Mon, 05/13/2013 - 03:35 | Link to Comment bdub2
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.

Mon, 05/13/2013 - 05:50 | Link to Comment smlbizman
smlbizman's picture

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

Mon, 05/13/2013 - 06:45 | Link to Comment SWRichmond
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?

Mon, 05/13/2013 - 06:51 | Link to Comment Headbanger
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!

Mon, 05/13/2013 - 06:58 | Link to Comment GetZeeGold
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......

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/11/rand-paul-obama-is-working-with-anti-american-globalists-plotting-against-our-constitution/

Mon, 05/13/2013 - 07:29 | Link to Comment markmotive
markmotive's picture

Japan is well on its way to financial armaggeddon.

http://seekingalpha.com/article/1428951-4-scary-charts-warning-of-the-ne...

Mon, 05/13/2013 - 15:55 | Link to Comment hangemhigh
hangemhigh's picture

@HB 

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………………..

 

Mon, 05/13/2013 - 03:09 | Link to Comment Robsabi
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".

Mon, 05/13/2013 - 05:33 | Link to Comment Snoopy the Economist
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.

Mon, 05/13/2013 - 06:46 | Link to Comment MisterMousePotato
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 ...)

Mon, 05/13/2013 - 09:38 | Link to Comment Kayman
Kayman's picture

Robsabi

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 ?

Mon, 05/13/2013 - 04:14 | Link to Comment Buck Johnson
Buck Johnson's picture

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

Mon, 05/13/2013 - 06:11 | Link to Comment MajorWoody
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.

Mon, 05/13/2013 - 06:41 | Link to Comment MisterMousePotato
MisterMousePotato's picture

Actually, ends with an "R."

Mon, 05/13/2013 - 09:42 | Link to Comment Kayman
Kayman's picture

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

Mon, 05/13/2013 - 02:49 | Link to Comment Burt Gummer
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.

 

http://www.youtube.com/watch?v=deuC8GPr31A

Mon, 05/13/2013 - 03:34 | Link to Comment Vendrell
Vendrell's picture

ill take under for 1 btc laying

Mon, 05/13/2013 - 06:13 | Link to Comment MajorWoody
MajorWoody's picture

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

Mon, 05/13/2013 - 05:08 | Link to Comment slaughterer
slaughterer's picture

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

Mon, 05/13/2013 - 05:44 | Link to Comment Room 101
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. 

Mon, 05/13/2013 - 06:18 | Link to Comment fonzannoon
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.

Mon, 05/13/2013 - 06:43 | Link to Comment GCT
GCT's picture

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

Mon, 05/13/2013 - 06:22 | Link to Comment Gringo Viejo
Gringo Viejo's picture

NIPPON THIS!

Mon, 05/13/2013 - 06:46 | Link to Comment slaughterer
slaughterer's picture

FOMC Schedule:

Monday, May 13, 2013  No Pomo

Mon, 05/13/2013 - 07:58 | Link to Comment Village Smithy
Village Smithy's picture

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

Mon, 05/13/2013 - 01:10 | Link to Comment CitizenLame
CitizenLame's picture

Be afraid People

Mon, 05/13/2013 - 01:11 | Link to Comment taniquetil
taniquetil's picture

Krugman already getting an article ready for the morning.

Mon, 05/13/2013 - 01:15 | Link to Comment lolmao500
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??

Mon, 05/13/2013 - 01:54 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

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

Mon, 05/13/2013 - 02:36 | Link to Comment resurger
resurger's picture

+1Mil

Mon, 05/13/2013 - 04:57 | Link to Comment Arius
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?

Mon, 05/13/2013 - 05:52 | Link to Comment e-recep
e-recep's picture

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

Mon, 05/13/2013 - 07:17 | Link to Comment chindit13
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.

Mon, 05/13/2013 - 10:46 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

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

Mon, 05/13/2013 - 01:15 | Link to Comment maskone909
maskone909's picture

my JGBD will run hard tomorrow!!!

Mon, 05/13/2013 - 01:27 | Link to Comment infiniti
infiniti's picture

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

Mon, 05/13/2013 - 01:33 | Link to Comment q99x2
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.

Mon, 05/13/2013 - 01:51 | Link to Comment Caviar Emptor
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.

Mon, 05/13/2013 - 07:06 | Link to Comment Apostate2
Apostate2's picture

I could not say it better. Kudos. 

 

Mon, 05/13/2013 - 09:15 | Link to Comment eclectic syncretist
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?

Mon, 05/13/2013 - 02:00 | Link to Comment Bunga Bunga
Bunga Bunga's picture

HALT, Oder Es Wird Scharf Geschossen!

Mon, 05/13/2013 - 02:05 | Link to Comment Kreditanstalt
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...

Mon, 05/13/2013 - 05:48 | Link to Comment Offthebeach
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.

Mon, 05/13/2013 - 09:25 | Link to Comment Quonk
Quonk's picture

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

Mon, 05/13/2013 - 02:12 | Link to Comment IridiumRebel
IridiumRebel's picture

Ruh roh.

Mon, 05/13/2013 - 02:16 | Link to Comment WTFUD
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

Mon, 05/13/2013 - 02:34 | Link to Comment LetThemEatRand
LetThemEatRand's picture

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

Mon, 05/13/2013 - 02:41 | Link to Comment akak
akak's picture

Jap bonds, banzai!

Mon, 05/13/2013 - 06:03 | Link to Comment DirkDiggler11
DirkDiggler11's picture

This has all the makings of a very interesting week across the entire spectrum of financial markets. From the Fx markets and the JPY to bond markets and Euro Zone Debt yields to the PM markets as the gap between paper prices and physical demand grows even wider.

The only given is the US stock makkets. While the trading action throughout the week will see increased volatility, you know that come Friday at 4pm the markets will be higher for the week. Go Ben Go, straight off the freaking cliff as his foot is stuck on the accelerator.

Mon, 05/13/2013 - 06:03 | Link to Comment USisCorrupt
USisCorrupt's picture

We have all been real life actors in the live version of the Wizzard of Oz, were you not informed?

Mon, 05/13/2013 - 06:22 | Link to Comment negative rates
negative rates's picture

I see the problem now, everyone is trying to follow the yellow brick road.

Mon, 05/13/2013 - 07:00 | Link to Comment JackT
JackT's picture

Mother bankrupt's default birthing pangs

Mon, 05/13/2013 - 07:06 | Link to Comment maxmad
maxmad's picture

This is the end Japan!  Sadly...

Mon, 05/13/2013 - 07:15 | Link to Comment mattdubz86
mattdubz86's picture

rut-ro bye bye gold

Mon, 05/13/2013 - 07:16 | Link to Comment mattdubz86
mattdubz86's picture

8am smackdown coming up

Mon, 05/13/2013 - 07:29 | Link to Comment mattdubz86
mattdubz86's picture

every time japan interest rate vol has spiked, gold has traded inversely a few hours after. watch out

Mon, 05/13/2013 - 07:34 | Link to Comment WhiteNight123129
WhiteNight123129's picture

It is funny, some people in the US still expect the Treasuries to rise when the central bank prints....

That is a very temporary situation...

 

Mon, 05/13/2013 - 07:48 | Link to Comment W T F II
W T F II's picture

"Market Anthropology" will be overlaying that JPN Bond Chart on the S+P 500 very soon....Cascade...!!

Mon, 05/13/2013 - 08:08 | Link to Comment Village Smithy
Village Smithy's picture

The possibility of a  "halt" being put on trading is lost on far too many. They have all been picking up the pennies thinking the exit doors would be wide open when the sell light started to flash. Just as easily as shorting can be halted, selling will be severly restricted. It will be "for the benefit of this great nation". Then head crony WB will be on CNBS telling us how he's buying with both hands.

Mon, 05/13/2013 - 08:23 | Link to Comment W T F II
W T F II's picture

The rules (in place now, but could obviously be changed at a whim or by edict..) call for a halt @ 7% down for 15min and then another @ 13% down for 15min and then potential closure @ 20% down. All measures are for the S+P for the circuit-breakers to be triggered.

Mon, 05/13/2013 - 08:44 | Link to Comment Village Smithy
Village Smithy's picture

I wouldn't be surprised to see the "closure" % lowered to 5%. In today's market that would be a "terrible sell-off". Now that Monetary Policy has morphed into Market Management policy anything is on the table.

Mon, 05/13/2013 - 08:44 | Link to Comment Judge Crater
Judge Crater's picture

Nice colored charts.  I wonder if George Soros bet against the Japanese government bonds.  And, how do you say "BEAR RAID!" in Japanese?  Like Gordon Brown's selling off British gold reserves at "Brown's bottom," Abe's economic policies are turning into an unmitigated disaster.    

Mon, 05/13/2013 - 09:00 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Inflate away is good. Take your time Japan, no need to rush. We want to enjoy the Japanese money shower. You have to love it.

 

 

Mon, 05/13/2013 - 11:25 | Link to Comment The Continental
The Continental's picture

But..but...but..I don't understand. Why wasn't trading in gold and silver suspended when their prices were falling through the floor?

 

 

/sarc

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