Don't just focus on the Iran-Israel conflict! Renowned financial blog: The real market danger comes from Japan.

According to Gate News, citing the well-known financial blog ZeroHedge and Phoenix Capital Research analysis, while the world is focused on the situation in the Middle East, another crisis is beginning to emerge: Japan's debt market is starting to collapse.

The article mentions that Japan can be considered the pioneer of crazy monetary policies. Every crazy measure implemented by central banks in Western countries over the past 15 years was first introduced by Japan a decade ago. The United States first introduced zero interest rate policy (ZIRP) and quantitative easing (QE) in 2008. Meanwhile, the Bank of Japan (BoJ) implemented the same crazy measures in 1999 and 2001.

Since then, the Bank of Japan has taken the following measures:

· The company has purchased so many Japanese stocks that it has become the largest shareholder of Japanese stocks globally. In fact, it is one of the top ten shareholders of 40% of the listed companies in the Japanese stock market (Nikkei Index);

· Acquired over 50% of Japan's outstanding debt;

· Introduce a single quantitative easing plan equivalent to 25% of Japan's Gross Domestic Product (GDP);

· Reduce the interest rate to negative values.

From the current situation, Japan's crazy behavior has come to an end. Inflation in Japan has arrived: the core inflation rate in May hit a two-year high, rising to 3.7% year-on-year, higher than the expected 3.6%. This is still after the Bank of Japan began tightening monetary policy for the first time in decades. As shown in the figure below, there has been no significant decline in the inflation rate.

(Source: ZeroHedge, Trading Economics)

As a result, Japanese government bond yields have soared to their highest level since 2008.

(Source: ZeroHedge)

This has posed a huge problem for the Bank of Japan. Firstly, as the world's largest holder of Japanese debt, the Bank of Japan will soon bear losses of hundreds of billions of dollars.

In addition, Japan's debt-to-GDP ratio has reached 260%: its total outstanding debt is approximately $8.5 trillion. If the yield on this massive debt continues to rise, Japan will soon face a debt crisis.

In August last year, the Bank of Japan was forced to raise interest rates for the first time since 2007, and the market felt it for the first time. As a result of this news, the yen's exchange rate surged, triggering systematic deleveraging, as yen carry trades (borrowing yen to purchase other high-yield risk assets) began to explode.

On that day, the Japanese stock market plummeted by 12%. The global market felt the impact, and the U.S. stock market dropped by 8% in just three trading days.

(Source: ZeroHedge)

The above issue is far from over. In fact, earlier this week, the Japanese Finance Minister was forced to adjust the country's long-term debt issuance plan in order to stabilize the domestic debt market. How long this situation will last is currently unknown.

ZeroHedge finally wrote: "In light of this, investors should closely monitor the timing of their exit while capitalizing on the current bull market. We urge clients to utilize a tool we have developed that has accurately predicted every major market crash over the past 40 years."