@dunepulse

Japan’s 2-year yield just hit 1% — a signal that the era of “free yen” borrowing is basically over. Markets expect BOJ to keep rates positive, but Japan’s economy is still fragile, so they can’t tighten too aggressively. If global growth slows or deflation risks reappear, they’ll likely ease fast. Higher yields also weaken the yen carry trade and pull Japanese capital back home, draining global liquidity. But this shift may be temporary; if the cycle turns down, Japan will probably be the first to pivot.

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