BOJ Sets $2 Trillion Bomb Ticking For Global Yields

By Garfield Reynolds, Bloomberg Markets Live reporter and strategist

The Bank of Japan is seeding uncertainty across global markets with a radical shift to its policy settings. The likely outcome is higher volatility and bond yields both in the Asian nation and around the world.

The potential impact is set to be extensive given Japanese portfolio investors hold some ¥308.4 trillion ($2.2 trillion) of overseas debt, based on the country’s balance-of-payments figures. The US dollar value is probably even greater because many of the bonds were acquired before the yen started to swoon early last year.