The Macro Minute with Darius Dale Will the BOJ blow up the 42 Macro Paradigm C bull market?
Jan 23, 2026
They examine Japan's bond and currency stress and whether it threatens the Paradigm C bull market. They unpack BOJ policy choices, fiscal stimulus risks, and implications for global central bank independence. They explore how a productivity boom from AI could drive disinflation and higher equity multiples. They discuss portfolio risk tools and the broader capital spending wave enabled by AI hype.
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BOJ Tightening Isn't Saving The Yen
- The BOJ's pause coupled with a possible April hike aims to calm JGB sell-offs and reflects hawkish undertones.
- Japan's weak yen despite tightening signals a fiscal policy discount that undermines currency support.
Fiscal Discount Threatens Major Currencies
- Markets assign a fiscal policy discount to Japan, which could later be applied to the U.S. given its worse fiscal position.
- Erosion of central bank independence is a high-probability outcome that pressures the dollar and supports alternatives like gold.
Move Away From Sovereign Bond Concentration
- Rotate away from sovereign bonds and consider diversifiers as fiscal-driven supply/demand imbalances widen.
- Use systematic risk management overlays to navigate emergent fiscal and monetary risks.