JGB Futures prices are dropping in a manner eerily reminiscent of the May period of debacle before the BoJ started to regain control. The catalyst for today’s biggest bond price drop in 3 months is Takatoshi Ito’s comments demanding the Government Pension fund starting greatly rotating from bonds to stocks:
- *JAPAN’S GPIF NEEDS TO START SELLING BONDS NOW, ITO SAYS
- *GPIF SHOULD REDUCE LOCAL BONDS TO AS LITTLE AS 35%, ITO SAYS
- *GPIF SHOULD RAISE JAPAN STOCK HOLDINGS TO 18% NOW, ITO SAYS
Stocks bounced higher initially but are losing most of those gains as bonds hit low prices of the session (and fears re-arise that the BoJ is not in total control after all). As we warned before, the JGB market is “dead” for all intent and purpose and there is simply not enough liquidity to support any significant selling pressure.
JGBs starting to look a lot like May’s debacle…
and intrday as the Nikkei collapses so bonds are now following suit…
It’s deja vu all over again as we have suffered weeks of daily jawboning the JPY lower (and stocks higher) and now comes the JGB Halts…
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/eUFoqEsuhcM/story01.htm Tyler Durden