The Bank of Japan’s policy board meets on March 18–19 with the overnight rate at 0.75%, the highest in thirty years. The market expects a hold. The decision itself is not the story. The language is. Two forces are pulling in opposite directions, and the words the BOJ chooses to describe the balance between them will determine whether April remains a live meeting or whether the next hike slips to June or beyond. ...
This is a follow-up to The Hidden Overall Commander of Operation Epic Fury May Have Been the Treasury Secretary. That piece argued that the economic logic of the operation pointed to Scott Bessent as the architect of its financial constraints. One week later, the framework still holds. But the scenario it depended on is under severe strain. The original thesis rested on a single pivot point: the Strait of Hormuz would reopen quickly, Iranian oil infrastructure — deliberately preserved — would become the basis of a deal, and oil prices would fall far enough to solve five of Bessent’s problems simultaneously. ...
In February 2026, Japanese life insurers sold ¥3.42 trillion in foreign bonds — the sharpest monthly exit since October 2024. The entire Q4 2025 figure, itself the largest quarterly reduction since 2008, was compressed into a single month. The Middle East conflict accelerated this. But the conflict did not cause it. That distinction matters more than most commentary has acknowledged. Why the money is moving Japanese life insurers manage liabilities that extend decades into the future. For most of the past twenty years, meeting those liabilities required reaching offshore for yield that Japan’s financial repression could not provide. US Treasuries, European sovereign bonds, dollar-denominated corporate credit — all of it was a workaround for a domestic market where the Bank of Japan kept yields artificially low. ...
On the night of February 28, 2026, Vice President JD Vance monitored Operation Epic Fury from the White House Situation Room. According to WBUR/AP reporting, he was joined by Secretary of Energy Chris Wright, Director of National Intelligence Tulsi Gabbard, and one person whose presence might seem unusual in a military operation: Treasury Secretary Scott Bessent. Defence Secretary Pete Hegseth called the operation “the most lethal, most complex, and most-precision aerial operation in history.” But I find myself wondering: was this operation designed by the military, or shaped by someone who thinks in bond yields, oil futures, and capital flows? ...
On 30 January 2026, President Trump nominated Kevin Warsh to succeed Jerome Powell as chairman of the Federal Reserve. The Senate confirmation process is underway, and Warsh is expected to take the chair when Powell’s term expires in May. Most Western coverage has focused on what this means for US rates and the dollar. Less discussed is what it might mean for Japanese equities, and why investors looking to diversify beyond an increasingly concentrated US market should be paying attention. ...
In the third week of January 2026, Japan’s 40-year government bond yield surged past 4% for the first time since the bond’s inception, eventually reaching 4.24%. The 10-year JGB yield hit 2.38%, its highest level in 27 years. It was the most violent sell-off in Japanese government debt in decades, and it sent shockwaves through bond markets in New York and London. If you are an American or European investor, you might have dismissed this as a local Japanese story. That would be a mistake. What happens in the JGB market affects your Treasury yields, your mortgage rate, and the stability of the global fixed-income market in ways that are not immediately obvious but are profoundly important. ...
Two reflationist academics, Toichiro Asada of Chuo University and Motohiro Sato of Aoyama Gakuin University, have been nominated to the Bank of Japan’s Policy Board. The market’s initial reaction was straightforward: the Takaichi government is signalling that it wants to slow rate hikes. The yen weakened, stocks rose, and long-dated bond yields steepened. A textbook reflationist repricing. But there is another way to read these appointments. And which reading proves correct has meaningful implications for how you position in Japanese equities. ...