When Bond Markets Break, Inflation Follows

The BOJ lost control of the long end. What happens next won’t stay in Japan.

Yes, the U.S. just had a terrible 20-year auction. 30-year yields nearly retested the October highs from last year as we hit 5.15% this week.

But that’s not the real story…

The real bond crisis is in Japan.

This week, Japan had its worst 20-year auction since 1987. Long-end JGB yields—30s and 40s—are ripping to all time highs.

Not because of growth or inf…