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!!
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with 10Y JGB Futures prices seeing their biggest 2-day selloff since Lehman...
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and 5Y Yields smashing higher to 13 month highs at the fastest rate in 30 months...
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as JPY goes from weakness to weakness...
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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)...
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Charts: Bloomberg