Japan Just Started the 30-Year Time Bomb – The Great Collapse Started?

[Igor Pereira]

While most traders are distracted by short-term noises, Japan's securities market has just issued the most dangerous signal in recent history. The income (yields) of the Japanese Government's securities 30 Years (JGB 30Y) reached the historical mark of 3.42% .

By Igor Pereira Financial Market Analyst

If you think this doesn't affect your Crypto or Forex portfolio, you're mistaken. When Japan moves that way, the whole world feels the earthquake. Below, I explain why this could be the trigger for a massive global liquidation.

1. The End of the Free Money Bank

For years, Japan has functioned as the world's cheap financing plug. The strategy was simple: Yen borrowed at zero interest and buy anything that yields more (US Titles, Shares, Cryptocurrencies).

With the long yields exploding to 3.42%, this math breaks.

• The Carry Trade Dies: No longer does it make sense to take an exchange risk if the cost of financing in Japan is rising. The result is the forced liquidation of risk assets around the globe to pay off these loans in Yen.

2. The Great Liquidity Cleaner

Japan's pension funds and insurance companies are huge. When household income (at home) finally becomes attractive (3.4% "risk-free"), the dynamics changes dramatically:

• Capital Repatriation: They have less reason to buy debt from the US or Europe and much more reason to bring the money back to Japan.

• The Effect: This drains the liquidity of Western markets. Less buyers for Treasures American means higher yields in the U.S. as well, which pressures technology actions and risk assets.

3. Why Is This Bad for Crypto?

Many ExpertFX students ask: "What does Bitcoin have to do with 30-year-old Japanese bonds?" . The answer is: Leverage and Liquidity.

• Cost of Leverage: Crypto is a surplus liquidity-driven asset. When global rates go up (punched by Japan), the cost of maintaining leveraged positions goes up.

• The Marginal Buyer Disappears: That speculator who used cheap credit to bet on Altcoins comes out of the game. Even with high-profile news (Bullish), the market is "heavy" because macro liquidity is being sucked in.

The JGB 30Y chart doesn't lie. We're seeing a structural change, not just a noise. If all are positioned on the same side (Long in Tech, Long in Crypto, Short in Yen), and funding (Japan) starts to move against them, volatility will be brutal.

My recommendation:

1. Monitor USD/JPY: Sudden movements here signal real-time deleveraging.

2. Reduce Leverage Exposure: This is no time to be a hero. The market floor (funding) is moving.

3. Watch out for Mystery Dumps: Falls without apparent news in Crypto will likely result from this drainage of mechanical liquidity from Asia.

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By Igor Pereira Financial Market Analyst