Bonds Get a Taste of What Happens When Central Banks Step Back

(Bloomberg) -- Bond traders just had an inkling of what it could be like when central banks and pension funds aren’t there to support them.

Japan’s bond futures tumbled by the most since 2016, triggering margin calls for investors, after the country’s worst 10-year debt auction in three years. Japanese government bond yields climbed and the curve steepened, while the sell-off also spilled into Treasuries and European debt even as euro-area data showed inflation remains lackluster.