Japanese 10-year yields below 0%
Negative yields in Japan and the flight to safety in global markets have broken the bond market. Japanese 10s are yielding -0.025% after a seven basis point decline today and 25 bps decline since the start of the month.
USD/JPY has already cracked but the overall market is walking on the razor's edge. For me, the fall into negative yields in Japan is the ultimate signal. Something is very wrong in global markets. The S&P 500 is 2.2% from the January lows but the Nasdaq has already broken down.
The market may give Yellen a chance to deliver a dovish bullet but in a week or two, I don't think it will matter.
