Japanese government bonds hit a six-month low today, and the 10-year came within a whisker of breaking into that long forgotten realm of positive yields.
It’s been a ferocious sell-off- the worst in two decades to be precise.
Since the 10-year JGB yield hit a record low -0.291 per cent at the end of July, yields have rocketed amid widespread headscratching over what the future holds for Japanese monetary policy, writes Joel Lewin.
In July, the Bank of Japan underwhelmed markets with a stimulus boost that fell short of expectations, while the government unveiled a 4.6tn ($45bn) fiscal stimulus package, sparking concerns the BoJ has run out of ammunition and adding fuel to the sell-off.
This post was published at David Stockmans Contra Corner on September 14, 2016.
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