Arthur Hayes: Surge in Japanese Government Bond Yields Could Lead Investors to Shun US Treasuries
BlockBeats News, January 21st, Arthur Hayes referenced a Bloomberg report on social media, stating that the problem faced by US Treasuries is what to do when Japanese investors, as their own government bond yields rise, choose to stay in the domestic market and no longer provide funding to the "US system."
The report indicates that Sumitomo Mitsui Financial Group, Japan's second-largest bank, plans to actively rebuild its holdings of domestic sovereign debt (JGB) once the Japanese government bond yields have finished their sharp rise (rout). Once this yield surge has "run its course," the bank is prepared to significantly increase its Japanese government bond investment portfolio, potentially doubling its size compared to the current level.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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The yen broke below the 156 mark overnight as the Federal Reserve’s hawkish rate hikes pushed the Bank of Japan to a “high-pressure moment.”
After the Federal Reserve raised interest rates, the Japanese yen fell overnight to 156.42. The market is betting that the Bank of Japan will raise rates by 25 basis points on Friday. If the stance is dovish, the yen could fall further to 158 or even 160.
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