Eurodollar University You Won’t Believe What Just Happened in Japan
15 snips
Jan 23, 2026 
Brent Johnson, macro investor known for dissecting monetary policy and credit cycles, breaks down Japan’s jaw-dropping government bond turmoil. He explains how tiny selling sparked huge price moves and why Japan faces brutal policy tradeoffs. They explore spillovers to China, rising gold demand, AI’s debt-fueled boom, and the geopolitical push toward deglobalization.
AI Snips
Chapters
Transcript
Episode notes
Thin Liquidity Amplified Japan's Bond Shock
- Japan's recent JGB meltdown shows tiny selling can trigger massive moves due to extremely low liquidity.
- Prolonged QE hollowed out the market so minimal selling turns into a cascading rout.
Two Conflicting Japanese Pressures
- Japan faces two battles: decades of low/negative rates followed by a sudden rise in inflationary pressure.
- That mix has sent long-term yields from near zero to multi-percent moves, stressing holders.
Domestic Holders Are Trapped In JGBs
- Large domestic holders (BOJ, insurers, pensions) bought JGBs at near-zero yields and sit deeply underwater as yields spike.
- Those holders will avoid buying until the BOJ signals stability, worsening market depth.