Japan will Rattle Global Markets...

The Bank of Japan's (BOJ) decision weeks ago to let yields rise more freely sent a signal to Global Powers that a shift within the global marketplace is imminent. Japan (Nippon) is the world's most indebted nation holding the largest amount of U.S. debt to date. Branded as the worlds' anchor for interest rates, Japan recent rate climb illustrates a change in its monetary policy (de facto abolishment) signaling to central banks, government powers, and corporates structures to rethink their overall holdings.

Why?

Ideally, low interest rates stimulate higher bonds prices and adversely higher interest rates make bond prices cheaper. So think about it, Japan has the longest streak on date of low interest rates causing its bondholders to sit on a low appreciating but stable "asset". BOJ's monetary policies geared towards maintaining ultra-low rates by any means created enormous acquisitions of its bonds (debt). So a slight rise in interest rates sends a rippling effect of depreciation in the books of the holders of the debt. The Japanese Yen's status as the "safe-haven" currency plays a major role as a "hedging" mechanism to global uncertainty.

The recent in rise in interest rates by the U.S corporation has caused it's banking system to be on the helms of an inevitable collapse. The same deal follows; U.S banks that held large amount of U.S Treasury Bonds on its balance sheet experienced a wave of depreciation from recent rates rise with more to come. China's economic slow-down along with its largest real estate developer China Evergrande filing for bankruptcy are just signs of a global collapse with the current monetary structure.

An increase in rates from the BOJ could be detrimental for the global markets in the near future. Global markets are currently unbalanced and headed towards a reset. We could see increased volatility with the Japanese Yen Futures Contracts and Yen related currencies as the BOJ's current chess move in its monetary policy exemplifies a SHIFT.

Let's see how the 🎲 Roll.

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