Meanwhile in Japan

Japan’s 20-year bond yield has surged to 2.78%, the highest in more than 25 years, as markets question the government’s massive stimulus package and its impact on an already heavy 263% debt-to-GDP burden. Expectations that these plans may require a more dovish BOJ are adding to the sell-off in JGBs. A key risk now is that Japanese investors — who hold USD 3.2 trillion in foreign assets — could begin repatriating capital, especially as US Treasuries lose money once hedged at 2.75% and the estimated USD 1.2 trillion yen carry trade starts to unwind. For now, the line holds while the yen remains weak, but these powerful macro forces are becoming an additional risk for global financial markets.

Definitely not the moment to step away from our Bloomberg screens and focus on early Christmas shopping.