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

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