The Bank of Japan’s massive bond-buying binge is creating all sorts of market distortions. The latest: the rate in one funding market fell briefly below zero. In other words, debt has gotten so scarce for non-BOJ buyers that some investors are willing to pay for the privilege of holding government bonds. Last Friday, March 28, rates fell to negative 0.011% in the “repo market,” where banks and securities dealers can secure funding for a few days or months. Specifically, banks looking to hold Japanese government bonds overnight from March 31 to April 1, had to pay a small premium — of 0.011% — to get those bonds. It ... (full story)