In Jackson Hole, Kuroda said:
Mr. Kuroda vowed to maintain Japan’s aggressive monetary-policy easing until the country reaches its 2% inflation target, which he said could happen as early as this fiscal year.If interest rates are going up then bond prices are going down.
Mr. Kuroda said that once inflation starts moving higher, 10-year government bond rates around 0.5% will not be sustainable.
I think Japan is primed for hyperinflation and just needs some kind of spark to light the positive feedback loop. Bonds dropping could be the thing to get the ball rolling. People don''t like to hold bonds that are dropping in value. The more people who sell the more they will drop in value. So we could set off the feedback loop. In fact, just the central bank chief saying bonds will be dropping might even be enough of a trigger.