The yield on Japan's 30-year bonds has risen sharply to an unprecedented high after 35 years of loose monetary policy. With a debt-to-GDP ratio of 230%, this is a signal that a "reckoning" is approaching after decades of borrowing at near-zero interest rates. 🇯🇵

Inflation is rising, yields are exploding, and increased defense spending is putting the Bank of Japan (BOJ) in a difficult position. They must choose between raising interest rates, which pressures debt, or keeping them low to avoid a depreciating yen, igniting the risk of a global liquidity crunch. 💥

The main danger is not in the Tokyo bond market, but in the yen carry trade. This is the "underlying" engine driving the global market since the 1990s, with a scale of $300B-$4T, hidden within leverage and derivatives. 📈

If the yen strengthens even slightly, the unwinding process will occur immediately and violently. Currencies could collapse, equities could bleed, and liquidity could suddenly disappear. We have already seen a "curtain-raiser" in 2024 with significant declines across global indices. 📉

Japan is approaching a point where interest payment obligations account for nearly 10% of tax revenue, signaling the end of the era of "free" global money. Interest rates are hard to lower, asset valuations are difficult to maintain, and the "everything bubble" is slowly losing oxygen.

The events in Tokyo today are not just a "blink," but also a sign of a major shift in the global financial regime that has lasted for three decades. 🌍

(This information is intended for market updates, not investment advice).

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