bonds japan Markets

Chaos In JGB Land Sparks Global Bond Rout After Margin Calls, ‘Horrific’ Auction In Japan

"Tantrum" risk comes calling.

"Tantrum" risk comes calling.
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2 comments on “Chaos In JGB Land Sparks Global Bond Rout After Margin Calls, ‘Horrific’ Auction In Japan

  1. I’m going to admit that I’m one of your readers who needs a little remedial help on this one. Help. If the yield rose because of reduced purchases by Japanese buyers of 10 year bonds, and those buyers will instead purchase foreign bonds, shouldn’t that increase demand for US and European 10 year bonds?? Or is the idea that the demand from Japan isn’t enough to increase developed nation bond prices, but that US and European banks and pension funds will also reduce purchases of long term bonds?? But if all these players stop purchasing long term bonds, where will the money go?? And, isn’t the steeper demand curve supposed to help a few players?? For example, shouldn’t it make it a bit easier for Japanese banks to make a few bucks?? But it looks like the Japanese banks are down today. Finally, I would think on the day the new sales tax goes into effect, the Japanese bond market would be signaling more fear of deflation, and the steeper curve might be a relief to a few folks in Japan. I may be the only confused reader, but would appreciate a little more explanation.

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