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This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document.
For 15+ years, one rule dominated the macro landscape: Chinese yields stay higher than Japanese yields. China was the growth engine; Japan was the land of "Lower for Longer." That world just ended. 🌏 For the first time in decades, Japanese 10-year yields have officially overtaken China’s. We are witnessing a total regime shift in real-time. 📈 The Great Divergence: By the Numbers JAPAN: 10-year JGB yields have skyrocketed from -0.28% (2019) to 2.10%—a level not seen since 1999. CHINA: 10-year yields have plummeted from 3.05% to 1.86%, hovering near record lows. Why is this happening? It’s a tale of two opposite crises: 🇯🇵 In Japan: The BoJ is hiking to 30-year highs. Prime Minister Takaichi is pushing a record FY2026 budget with massive military spending. Fiscal expansion + Rate hikes = A bond market under siege. 🇨🇳 In China: The real estate downturn is biting hard. Deflation risks are mounting, and the central bank is forced to keep easing just to keep the lights on. The "Lose-Lose" Trap for JGB Investors 🪤 If you're holding Japanese bonds, where is the exit? Scenario A (Growth Re-accelerates): The BoJ is forced to hike faster than anyone expects. Bond prices tank. 📉 Scenario B (Growth Slows): JGBs underperform higher-yielding peers like US Treasuries. Investors flee for better returns elsewhere. ⚠️ The Contagion Risk This isn't just a Japan problem. This is a Carry Trade Nightmare. For years, traders borrowed "cheap" Yen at 0% to bet on global assets. Now, the cost of that debt is exploding. If the Yen strengthens and yields keep climbing, the "unwind" could send shockwaves through global markets. The era of free money in Japan is officially dead. Is your portfolio prepared for a world where Japan is no longer the "anchor" of low rates? 💬👇 Source: Global Markets Investor
That difference matters. Source: Goldman Sachs, COATUE
"German manufacturing orders for November surprised sharply to the upside, with the year-on-year figure rising +10.5%, versus expectations of +2.9%. Outside of the post-Covid rebound, this marks the strongest increase in almost 15 years. The data were boosted by large orders linked to government rearmament plans, but even stripping out such lumpy items, there has been a clear and gradual improvement in underlying momentum over recent months“ (Jim Reid, Deutsche Bank) Source: DB through Daniel D. Eckert @Tiefseher on X
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