It’s happening again. From Japan to the US, the world’s biggest government bond markets seem increasingly unstable, prone to flash crashes.
On Tuesday, what began as a quiet trading day in Tokyo quickly morphed into chaos. Yields on the country’s ultra-long bonds jumped by more than 25 basis points, reminiscent of a similar episode last May. A selloff in the US market followed, with the 30-year yield hovering near its late 2023 peak. Japan’s longer maturity bonds rebounded on Wednesday after Finance Minister Satsuki Katayama called for calm.
Nonetheless, it’s worth asking why sudden global bond routs are becoming so ...
