The BOJ is stuck in a vicious cycle:
– Ultra-low rates fuel the yen carry trade.
– Rising global rates drive yen depreciation.
– Depreciation forces intervention, depleting reserves.How long can Japan sustain this balancing act before the market breaks it?
— Lukas Ekwueme (@ekwufinance) January 21, 2025
The JGB-US Treasuries spread is nearing a critical level.
Fun Fact: the spread between 10Y JGBs and 10Y US Treasuries is testing for the 4th time the level that, once broken in the late 1980s, spectacularly burst the Japanese stock market and economy bubble. ⚠️ https://t.co/D5Ju6wWl3f pic.twitter.com/sJxdMRKIsn
— JustDario 🏊♂️ (@DarioCpx) January 22, 2025