Ahead of tonight’s 10Y JGB auction and reportedly the unleashing of Abe’s fiscal stimulus, it appears the world’s investors are losing faith in the Bank of Japan’s buying power and the MoF’s credibility as Japanese government bonds are collapsing for the 3rd day in a row. With the biggest crash in prices (JGB Futures) since May 2013 (back to 5 month lows), yield across the entire JGB curve are exploding higher since Kuroda punted last week and questioned monetary policy effectiveness.
As the world awaits Japan’s over-promise and under-deliver fiscal stimulus…