Loading ...The Music Just Stopped: Japan Banking Giant Norinchukin To Liquidate $63 Billion In Treasuries & European Bonds To Plug Massive Unrealized Losses
UPDATED — NO LONGER BEHIND A PAYWALL
There’s a name for this: a firesale, but – drumroll – a “gradual” one, because that’s how firesales supposedly go in Japan.
Luckily, the one thing nobody has to guess, is what happens next: as the wonderful movie Margin Call laid out so very well, once you realize that the music has stopped, you have three choices: i) be first, ii) be smarter, or iii) cheat. In the case of Japan’s Norinchukin, it has decided the time has come to liquidate before everyone else. We wonder how “everyone else” will take this particular news..
“Massive sales by Norinchukin could have a sizable effect on the U.S. bond market.”
This article requires a subscription (that I don’t have) so the headline is posted as a heads-up — I am sure this will get lots of coverage in coming week!
I posted about this here a few months back, in reaction to suggestions that treaury rates would fall.
Instead, the risk is that BOJ would have to sell T’s to support the yen in the case of bank failures. This obscure bank was named in particular.
The same dynamic applies to China and its real estate issues.
No reaction in the Bond market at all ….so
US markets are closed today — Juneteenth Day…….don’t know if that means anything as money never sleeps………
Because this is old news. The headline comes out now but this was on the FEDs radar back in 2023 and do you really think they are going to announce ahead of time they have to sell this amount of Treasuries before they do so. Those bonds almost surely were already sold. If there is any market reaction it is because others are going to follow in the same path.