Little Spoon's avatar
Little Spoon 10 months ago
Would love if you explained the Japan dynamic you mean here. They sell treasuries to support yen? Carry trade stuff?

Replies (1)

Yes, exactly. Not only does the bank Japan have around 1.2 trillion in treasuries, but basically every single actor in the car trade uses the US government bond market as the collateral for the trade . This means that when they get liquidated, they have to dump the bonds which causes the yield to spike