JGB Carnage Sparks Contagion Across Global Bond Market

• JGB Carnage Sparks Contagion Across Global Bond Market
  by Tyler Durden, www.zerohedge.com  
  Disappointing fiscal stimulus, loss of faith in The BoJ, and increasingly headless-chicken policymakers has sparked a sudden and severe rush for the exits from Japan’s government bond markets. 10Y JGB yields exploded from -30bps to almost 0bps in the last 4 days – the biggest crash in prices in over 3 years. This bloodbath is roiling the rest of the global developed bond market with Bund yield spiking (+12bps in last 2 days, almost back to 0), Swiss, UK, and Danish bonds are all blowing out, and Treasury yields up 14bps since Friday alone.
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  As the world’s third largest economy approved 13.5 trillion yen in fiscal measures on Tuesday, market sentiment remained bruised by the Bank of Japan’s decision last week to ramp up its bond-buying scheme by less than many investors has expected. A shift in policy towards fiscal stimulus from monetary easing is seen as having less direct impact on asset prices.
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  Japan’s 10-year bond yields rose more than 10 basis points to a 4-1/2-month high of minus 0.03 percent after tepid demand was seen for a 2.4 trillion yen ($23.42 billion) 10-year auction.
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