Global Depression Trigger Mechanism: Collapse Of Japanese Govt Bonds 10-Year Now At 1%!!! Japanese Bond Market Closed Nikkei Down Over 1000 Points!!! Start Of Reflation Bubble Bust?!?!

Japanese government bond (JGB) yields soared to 1 percent on Thursday, their highest level in a year, prompting the Bank of Japan to hold true to its promise of taking action to stabilize an incredibly volatile bond market.

Analysts expected the market volatility to last for a while, but added that buying by domestic pension funds and the central bank should help keep a lid on yields.

Benchmark 10-year JGB yields jumped as high as 1.002 percent as debt markets globally sold off on comments from the Federal Reserve chief overnight that fueled worries about an early unwinding of the central bank’s asset-buying program….

• This will not end well for Japan: A mere rise in interest rates to 3% would consume Japan’s entire tax revenue just on interest on its national debt
• Nikkei Plunges 1,143 Points (7.32%); Global Equities Hammered; Start of Reflation Bubble Bust?

Japanese Bond Market Halted At Open As Bond Selling Purge Goes Global

Japanese government bonds (JGB) futures have been halted once again this evening as the market opens down over 1 point. 10Y yields smash 11.5bps higher to 1.00% and 5Y yields add 6bps to 47bps. These are quite simply unprecedented moves in what ‘was’ a safe asset class and impresses yet another VaR shock on the market (as we detailed here). What this means practically is that Japanese banks push further into insolvency land (as we explained here) today’s move wipes out another 1.5% of blended Tier 1 capital off the entire Japanese banking industry. Since the 10Y JGB yield lows of 32.5 bps on April 5, the move is rapidly approaching a full percentage point, or the parallel shift amount that the IMF warned would lead to 10% and 20% MTM losses for regional and major banks respectively. Today’s jump in 10Y yields continues the post-BoJ regime of greater-than-six-sigma moves…something no risk model can withstand for three weeks. Just a good job the BoJ didn’t have anything at all to say about this totally disorderly fiasco yesterday.

JGB Futures plunge to two-year lows…

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Japan markets plunge most since March 2011; Nikkei futures halted