How the Bank of Japan Blew Up Global Markets in 2022

The Bank of Japan began 2022 in “forgotten obscurity,” but it’s now at the center of some of the worst cross-asset market conditions on record.

Real Vision Global Markets Editor Weston Nakamura first alerted investors to the #BankofJapan’s policy divergence in January 2022.

Tokyo-based Nakamura looks back at the historic first six months of the year through the lens of the BoJ and its controversial “yield curve control” effort.

This is the only major central bank still actively easing. Indeed, its peers are aggressively tightening to fight global inflation. And the Japanese yen reflects this divergence, plummeting to multi-decade lows.

The BoJ continues to do battle with traders piling into the now-infamous “short Japanese government bonds” widow-maker trade, purchasing a record amount of JGBs to defend its 25 basis point yield peg.

That’s even as Japan sees its first episode of inflation in decades. Governor Haruhiko Kuroda enters his final year with the BoJ in crisis, having established his candidacy for the most radical central bank head in modern history.

In this video, Weston talks about JGBs, global rates, and currency markets, as unprecedented developments in Japan spill into the rest of the world.

Follow Weston on Twitter @acrossthespread for real-time market commentary on the Bank of Japan and global markets.

Read his thread on market data providers’ errors on live JGB prices here:

See Weston’s original videos for Real Vision on the Bank of Japan:

Why Global Markets Are Addicted to the Bank of Japan:

How Bank of Japan Uses Media to Test Policies:

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