One Bank Makes A Stunning Discovery: The Bank Of Japan’s YCC Is Broken And Soon The Entire JGB Market Will Cease To Exist

Everyone was so focused on lettuce and the Fed blowing up the US economy, nobody noticed that YCC has now failed and the grand MMT experiment is hanging by a thread. pic.twitter.com/6MJglr248f

— zerohedge (@zerohedge) October 21, 2022

• One Bank Makes A Stunning Discovery: The Bank Of Japan’s YCC Is Broken And Soon The Entire JGB Market Will Cease To Exist
  by Tyler Durden, https://www.zerohedge.com/
  Several days ago, around the time of Friday’s historic, largest-ever BOJ intervention in the FX market, we pointed out something which almost nobody had noticed: the BOJ’s Yield Curve Control had already failed on several occasions, with 10Y yields crossing well above the 0.25% Yield-Curve Controlled barrier…
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  … and that Kuroda was valiantly injecting trillions of yen in the financial system to defend a barn door that has already been blown open.
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  But one person did notice what was quietly going on below the unmoving surface of the JGB market, where the BOJ now owns more than half of the entire Japanese bond market and where days can pass without a single trade crossing: that person is DB’s FX strategist George Saravelos and in his Monday FX blog titled “Broken”, writes that “the below chart shows something striking: the Bank of Japan’s yield curve control policy is, for all intents and purposes, already broken. Only the three 10-year government bond yields that are now eligible for the BoJ’s fixed rate buying operations trade at or below the 25 basis point yield cap. Bonds maturing on either side of the targeted maturity now trade with yields materially higher than the cap.”
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  read more.

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