DesmondMilesDant OP t1_j9g03bz wrote on February 21, 2023 at 5:31 PM

Reply to comment by MiltonFriedman_ in Wall Street Newsletter S02E07 : Why is there such a disconnect b/w Stock and Bond market? by DesmondMilesDant

Well bond yields in Japan go up in two ways.

-> Manually : Boj will widen the gap from 50bps to 75bps on 10yr JGB. Still doing QE+ i.e. buying bonds to keep it from rising further above 75bps.

-> Automatically : Boj will remove Ycc causing 10yr JGB to rise on its own and let free markets decide. Boj will stop their QE+ now.

Note : YCC began in 2016. The objective was to make inflation go over 2% and not casue a deflationary bust. So they started infinite money printer. Now things have changed. Japan has inflation. So maybe they give up on Ycc but it won't be that easily considering its Ueda-san soon in the helm.

MiltonFriedman_ t1_j9lvyu3 wrote on February 22, 2023 at 10:29 PM

Thanks for the reply!