“It’s A Seismic Shift” – Japan’s Biggest Bank To Quit As JGB Primary Dealer

• Why would any for profit organization buy a JGB (Japan Govt Bond) at negative interest rates? Bank of Tokyo-Mitsubishi UFJ is making a sensible move. Prolonged negative interest rates implies the failure of the bond market. The last man standing ie. Central banks will have to monetize all debts ie. QE to infinity. Otherwise, the whole financial system will collapse. But by monetizing all debts, it will create inflation and also a total loss of confidence in: central banks, the economic and financial system. Got physical gold yet?
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• “It’s A Seismic Shift” – Japan’s Biggest Bank To Quit As JGB Primary Dealer
  by Tyler Durden, www.zerohedge.com  
  Ever since the launch of Japan’s QE, and worsening in the aftermath of January’s shocking NIRP announcement, Japan’s bond market, which moments ago slid to new record lows yields across the curve, has had its share of near-death experiences: between repeated VaR shocks, to days in which not a single bond was traded, to trillions in bonds with negative yields, it has seemed that the Japanese Government Bond is on life support. That support may be ending.
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  According to Nikkei, and confirmed by Bloomberg, Japan’s biggest bank, Bank of Tokyo-Mitsubishi UFJ, is preparing to quit its role as a primary dealer of Japanese government bonds as negative interest rates turn the instruments into larger risks, a fallout from massive monetary easing measures by the Bank of Japan. While the role of a Primary Dealer comes with solid perks such as meetings with the Finance Ministry over bond issuance and generally being privy to inside information and effectively free money under POMO, dealers also are required to bid on at least 4% of a planned JGB issuance, which as the Nikkei reports has become an increasingly heavy burden for BTMU.
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  In other words, one of the key links that provides liquidity and lubricates the Japanese government bond market has just decided to exit the market due to, among other thinks, lack of liquidity entirely due to the policy failure of Abenomics in general, and Kuroda’s disastrous monetary policies in particular. One could, of course, ask just how does BTMU plan on also exiting the Japanese economy itself, if and when the country’s $8 trillion bond market implodes, but we doubt the bank will ever be able to answer that.
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  The ministry is expected to let the bank resign.
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  read more.

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