Japan's negative rates a looming headache for BOJ

The $9 trillion market for Japanese government bonds had been all but paralyzed since the BOJ began a massive monetary easing three years ago that made the bank the dominant buyer.

The author gets the cause-effect relationship backwards on this one.

The BOJ became the dominant buyer of JGBs because of massive purchases through its quantitative easing program, that caused JGB yields to tank, and paralyzed the $9 trillion market for JGBs.

The BOJ's government bond purchases represent lots of freshly printed yen, and central bank picking up the tab for government spending (monetizing fiscal spending), but still no inflation.

but still no inflation.

It is like magic.

It works until it doesnt. Yen crash, hyperinflation and asset confiscation together with capital controls expected in short order

If you believed that the government could achieve its 2% inflation target in the near future, why would you buy long-dated bonds that yield nothing? Either the people buying the bonds don't believe the government can reach its inflation target or they are daft.

Cyprus, Greece, Japan, next?

But the Yen keeps getting stronger! Why?

The yen still gets stronger as yen yields go negative then institutions borrow the yen and exchange it for higher yielding fx investment options.The carry trade completely distorts and disconnects from the real world value of the yen but outside investment allows borrowers to cash in.....