apan’s Bond Market Is Flashing Alarms – Carry Trade at Risk?

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🚨 Japan just witnessed its weakest 20-Year Government Bond auction since 1987, triggering a spike in long-dated yields:

📉 Bid-to-cover ratio at lowest since 2012

📉 Tail (spread between avg. & lowest accepted bid) was massive

📈 40Y JGB yield hit all-time highs

📈 30Y at highest since it was introduced in 1999

📈 20Y at highest level since 2000

This is a BIBLICAL move in the JGB complex.

📌 The implications?

Japan’s carry trade—a pillar of global liquidity—could be under pressure

Global bond markets may reprioritize risk

BoJ is walking a tightrope: intervene now or risk a credit crunch later?

Penafian

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