The BoJ should be careful what they wish for. There is no scenario under which JGBs can rally from these levels. There is no upside with their aggressiveness, only downside. In fact, they risk bringing down the whole house of cards. The central tenet of the asset inflation of the past 2 decades has been central bank omnipotence. The BoJ risks pulling back the curtain on this fantasy. In fact, I think they just did. Have we crossed the Rubicon into a different world, one in which central bankers do not control events and economic laws overwhelm their feeble attempts to do so?
~ Kevin Duffy, April 5, 2013