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The Bank of Japan bought 75% of JGBs in FY17… and Yields Are Still Up

Interest-Rates / Japanese Interest Rates Mar 17, 2018 - 12:25 PM GMT

By: Graham_Summers

Interest-Rates

The insanity of Central Bankers knows no bounds.

The latest indication of just how far “down the rabbit hole” the financial world has gone comes from Japan where it was announced that the Bank of Japan bought 75% of Japanese Government Debt issuance in FY17.

That is not a typo. Japan’s Central Bank bought $3 out of every $4 in debt Japan issued in fiscal year 2017. And it now owns 40% of Japan’s total debt outstanding.


Things have gotten so out of control that on Tuesday this week not a single 10-Year Japanese Government Bond was traded. Put another way, the daily volume on the 10-Year Japanese Government Bond was ZERO for an entire day.

There’s an expression for this kind of investment behavior: it’s called “cornering the market.”

Astonishingly, the BoJ is STILL beginning to lose control of its bond market. Currently the BoJ is targeting a 0% yield on the 10-Year Japanese Government Bond. Despite this, the yield on the 10-Year Japanese Government Bond has remained above this level for the better part of the last year.


Japan is not alone here. Globally bond yields are rising in most of the major debt markets including Germany, the UK, and the US.


Put another way, despite spending over $14 TRILLION trying to corner the bond markets, Central Banks are STILL beginning to lose control. The Everything Bubble is beginning to burst.

On that note, we are putting together an Executive Summary outlining all of these issues as well as what’s coming down the pike when the Everything Bubble bursts.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here:

https://phoenixcapitalmarketing.com/TEB.html

Graham Summers

Phoenix Capital Research

http://www.phoenixcapitalmarketing.com

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and unde74rvalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

© 2018 Copyright Graham Summers - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Graham Summers Archive

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