Bond meltdown in Japan

Investment Analysis Clubs Macro Economic Trends and Risks
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Interesting to see where this is going and if it will spread. Holding long term bonds now starts to seem high risk:

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No sign yet in the US 30 year Treasury. But we will keep watching since trends are for higher government spending.

Wendy

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There was a sell off yesterday (Tue) but it’s calmed down at the moment. However, Trump is addressing the WEF about now so anything could happen:

Global government bond markets moved to calmer waters on Wednesday after a massive selloff Tuesday, which was sparked by a huge rise in Japanese government bond yields.

Bond investors cautiously await President Trump’s speech at the World Economic Forum in Davos, Switzerland, at 1330 GMT, which could spark further volatility amid tensions over his plans to acquire Greenland.

https://www.wsj.com/finance/global-bond-markets-calm-after-tuesdays-huge-selloff-await-trumps-speech-1950caef?gaa_at=eafs&gaa_n=AWEtsqfWd3Akg3MypP4eD99a_yNLg5aEkc-qjjK62ac60xuf01BZ4iyjGJ5U-jNc5Bk%3D&gaa_ts=6970e153&gaa_sig=ESQxTAYlDla6eLTR5B74KY7kQOuhoNsOeGKTZRBXRKNhh6mB320pRrGMLEf7ClLrWi6iovS0s7Kk2Ei9U5o6rw%3D%3D

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FWIW, the New York markets opened up with the VIX down. In the bond market the 10-yr yield is down (prices up).

DB2

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Meanwhile, Japan’s PM has called a snap election in February. How will voters in Japan respond? Do they have good choices?

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Since the Liberal Democratic Party lost its majority politics there has been a shambles - 4/5 prime ministers in the last 4/5 five year. Slush funds, electorate unrest because of poor economic performance.

It is unlikely an election will solve anything there.

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I’m curious, how would you define good choices?

The LDP (Takaichi’s party) has only a one-seat majority so if there aren’t other candidates it would be a surprise.

DB2

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