A ticking, aging time-bomb in JGBs

I wonder how many people have thought that and lost a lot of money... I tend to believe that US treasuries have to go down soon, but looking at this chart makes me seriously reconsider it.

The major differences between the US and Japan in the 90s; Japan had the stock market bubble burst and real estate at essentially the same time, the US had some lag time between the tech bubble and real estate. Japan has an aging population entering retirement, the US, mostly because of immigration, doens't have as big of a problem with that, the workforce is growing instead of shrinking.

Maybe I am just talking my position and thinking of reasons why I am right. Thoughts?
 

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There was talk they wanted to nationalize the central bank for failing to stop deflation. This could be a catalyst for a trade there
 
Quote from Ghost of Cutten:

What do you guys think of this spread trade? Can anyone see a situation where JGBs rally big without other G7 debt also rallying?
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Looks like AUDJPY (as one would expect)... I guess I can see scenarios where certain countries "decouple".

I think it's a decent outright short, since, as you said, carry/roll is relatively low. To me, it has an asymmetric option-like payout.
 

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We're getting close to a major puke.

I was trading JGBs in 1998 and saw 10 year yields go from 56bp to over 2% in a matter of weeks.
1999 was pretty volatile too.

Then in 2003 I think the 10 year low in yield was around 43bp off the top of my head. Again I think the 10 year got to around 2% in a very short period of time.

Currently 10 year yield is around 84bp so in theory we could still rally a couple of big figures before we top out.

But after rising for 14 of the last 15 days this could be the final blowoff rally and although we might be a little off the top price wise, I think time wise we might be very close indeed, maybe days or weeks.

The catalyst could be anything but the fact that politicians are getting more and more desperate to weaken the currency and finally force their way out of deflation is the most likely trigger.

Typically a JGB short is the graveyard trade for non Japanese but once in a while it provides a major opportunity. The fact that Elite Traders are now discussing the JGBs is interesting...
 
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