While much of the financial world assumed the Bank of Japan could keep a lid on long-term interest rates indefinitely, the chart was telling a different story.
In July 2022, Elliott Wave International’s Global Market Perspective highlighted a completed corrective pattern in Japan’s 10-year government bond yield and projected the start of what Elliotticians call a third wave — typically the strongest and most dynamic portion of a trend.
July 1, 2022:
“The completion of wave 2 will then lead to a sharp and extended rally in wave 3 of (3).”
Murray Gunn, Head of Global Research, put it plainly a few weeks later in a Daily Update: despite the Bank of Japan’s efforts to cap yields through yield curve control, the market was building pressure for what he described as an “explosive rise.”
Daily Update, July 20, 2022:
“The Japanese central bank has been the odd man out of global central banks this year by refusing to tighten its monetary policy, sticking with its yield curve control whereby it seeks to cap the level of the 10-year Japanese government bond yield. As we have pointed out before, though, the 10-year JGB yield is showing signs that an explosive rise is coming.”
That is exactly what happened.
Japan’s 10-year yield went on to break decisively higher, reaching levels few investors believed possible just months earlier.
A market that appeared tightly controlled by policymakers ultimately followed its own internal structure.
The broader lesson is straightforward: markets often begin to change direction before the consensus narrative catches up.
Today, Elliott Wave International continues to monitor these same structural patterns across global bonds, currencies, equities, commodities and cryptocurrencies.
See What We’re Saying Now:
For broader coverage of more than 50 of the world’s most-traded markets — including global interest rates, stocks, currencies, commodities, metals and cryptocurrencies — see Global Market Perspective. Get it now >>
For ongoing Institutional-Level coverage and macro analysis focused on interest rates, capital flows and central bank dynamics, see Murray Gunn’s Global Rates & Money Flows service. Learn more >>
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Murray Gunn Head of Global Research
Murray Gunn, MSTA, CFTe, CEWA, is Head of Global Research at Elliott Wave International. He worked as a fund manager in global bonds, currencies and stocks, including long posts at Standard Life Investments and the Abu Dhabi Investment Authority. Prior to joining EWI, he was Head of Technical Analysis at HSBC Bank. Murray is the author of the 2009 book Trading Regime Analysis and a contributor to Socionomic Studies of Society and Culture (Socionomics Institute Press, 2017). Murray is at the helm of EWI’s Global Rates & Money Flows and The European Short Term Update, while also providing commentary for Global Market Perspective.
