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Traders Lose Faith In BoJ As Another Weak Japanese Auction Sparks JPY, JGB Turmoil

Yet another weak Japanese bond auction (this time 5Y maturity - lowest bid-to-cover and biggest tail since 2013), on the heels of last night revelations of a growing chorus of JPY-devaluation-fears has many wondering if the faith they placed in The BoJ's grandest experiment was wrong after all. With speculators now net short for Japanese stocks for the first time since Abenomics was unleashed, a series of weak bond auctions and a spike in JGB yields since the ECB unleashed QE, and now a surging JPY (tumbling USDJPY) as carry trader around the world pull back on leverage and exposure... perhaps - the idea that a nation can devalue itself into prosperity on the backs of the rest of the world was total idiocy after all and Kyle Bass' Potemkin Village is about to fall.

 

Specs Net Short Japanese stocks for the first time since Abenomics...

 

Even the BoJ's ability to transform priunted money into wealth creation via the stock market is fading...

 

Another weak bond auction (lowest bid-to-cover and biggest tail since 2013) spikes JGB yields (remember, Japan cannot afford higher yields or the entire ponzi explodes under the weight of the interet burden and so The BoJ soaks up as much as possible to manage it... it has clearly lost control)...

 

And since The SNB / QECB double-whammy was unleashed it's really ugly.... the blue lines are recent weak JGB auctions

 

and for some context of just how huge these moves are... here is the JGB yield curve shift!!

 

As the last 24 hours has seen the final nail of USDJPY carry traders losing faith...

 

 

Charts: Bloomberg