Yardeni Research | Japan’s Brawl With The Bond Vigilantes

Executive Summary:

After last week’s portentous Japanese government bond auction, in which demand was so weak as to be off the charts, William explains what went wrong and why. Contributing factors included the BOJ’s halted tightening owing to “tariff haze,” the Prime Minister’s unfortunate remark likening the nation’s fiscal situation to that of Greece, and vestiges of Japan’s economic past. But having Japan-specific causes doesn’t detract from investors’ fear that this auction was a canary in a coal mine, portending more upheaval for global financial markets and more difficulty for global policymakers amid Trump’s Tariff Turmoil. … Also: The implications of Japan’s economic turmoil for the world at large and the conundrum facing the BOJ right now. Check out the accompanying chart collection.

Japanese Bonds I: Why Tokyo Is on the Ropes.

Rarely has a single bond auction said so much about the fragile state of the global financial system as the one Tokyo held on May 20. As the sale of 20-year Japanese government bonds (JGBs) flopped, many sensed a canary-in-the-coal-mine moment for global markets reeling from President Donald Trump’s tariffs.

▌View Related Live Charts:
Japan 10-year Government Bond Yield , Japan 30 Year Government Bond Yield

The fear is valid, even if the “Armageddon talk” going on may not be.

Tokyo’s weak debt sale

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