Arthur Hayes warned that the Bank of Japan’s bond tapering could lead to market disaster, with weak demand in recent bond auctions and record high yields signaling growing concerns in the financial sector.
The central bank’s strategy to reduce bond purchases has resulted in volatility in the debt market. Notably, key institutional investors are pulling away, leading to confusion about the tapering pace among market participants.
With Prime Minister Shigeru Ishiba highlighting potential economic woes, the bond market faces increased scrutiny. Investments are becoming riskier as yields spike, raising concerns about Japan’s fiscal health and the BOJ’s control over monetary policy.
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