Japan is losing control of its bond market and is threatening to dump $1.2 trillion in U.S. Treasuries that risks unwinding the Yen carry trade which could erase the last two years of stock gains overnight.
At least three banks this morning calling for immediate YCC in Japan.
Back to square zero
— zerohedge (@zerohedge) January 20, 2026
Factcheck: Based on current reports, the specific banks aren’t named publicly, but calls for immediate YCC stem from analysts at firms like Citigroup, Goldman Sachs, and JPMorgan amid surging JGB yields (10-year at ~2.3%). This aims to cap rates and stabilize markets. Check Zerohedge for updates.
U.S. Treasury yields spike on bond market fears.
U.S. Treasury yields jumped Tuesday as investors weighed renewed tariff threats from Washington that revived fears of a trade war with Europe and spurred a flight from U.S. assets.
The yield on the benchmark 10-year Treasury was last seen trading more than 6 basis points higher at 4.295%. Yields on longer-dated 20- and 30-year Treasurys spiked, adding around 8 basis points to trade at 4.878% and 4.92%, respectively. One basis point is equal to 0.01%, and yields and prices move in opposite directions.
Along with U.S. equities, the U.S. dollar came under pressure. The dollar index
was last down almost 1%.
Japan calls (surprise) snap election.
Less than half a year into office and Japan’s new prime minister, Sanae Takaichi, has called a snap election, dissolving the Lower House on Jan. 23 and sending voters to the polls on Feb. 8.
“I am putting my future as prime minister on this election,” Takaichi said at a press conference Monday, according to a Google translation of her remarks in Japanese.
“I would like the people to make a direct decision on whether they can entrust the management of the nation to Sanae Takaichi.”