This is why markets are bleeding right now.

Japan’s 10-year government bond yield (JP10Y) just touched 1.88% - the highest since 2008.

Why does that matter?

Because for almost three decades, Japan was the liquidity well of the world.

Near-zero rates. Endless cheap money.

Capital could be borrowed in yen for next to nothing and deployed into US Treasuries, equities, emerging markets, risk assets - everywhere.

Now that era is reversing.

While the US and Europe tightened aggressively, Japan stayed ultra-easy.

They held YCC. They kept rates pinned. They became the last cheap funding source left.

But inflation finally forced their hand - and yields are rising fast.