Japan's bond and currency markets have been in a sell-off similar to the UK's Liz Truss crisis for the past two years.

Japan's official foreign exchange interventions are ineffective and signal a government in denial about its market problems.

Investors are increasingly concerned that governments in developed economies will be tempted to inflate away their high debt levels by pressuring central banks to print money.

Japan's gross government debt stands at 240% of its GDP.

The U.S. government deficit is currently running at approximately 6% of GDP.

The U.S. Treasury market has significant vulnerabilities due to high leverage in the basis trade and the swap spread trade.

Despite continuously rising long-end government bond yields, the Japanese yen has been falling, a worrying anomaly for a G10 currency.

In March 2020, the U.S. Federal Reserve purchased $1.5 trillion worth of treasuries over two months to stabilize the market during the pandemic.

The European Central Bank intervened in the summer of 2022 to cap Italian and Spanish government bond yields, introducing new policy tools to do so.

Emerging market currencies are experiencing a long-term trend of appreciation against the US dollar, driven by a convergence of central bank credibility with G10 standards.

Brazil's central bank acted more decisively to combat post-COVID inflation, hiking interest rates earlier and faster than G10 central banks.