The Yen continued its plunge Wednesday evening (Thursday in Japan) dipping below the .99 level after having busted the 1.00 level to the downside for the first time since April 2009.

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In response, the Nikkei rose as much as 3%, now up a “modest” 375 points (2.65%) as of 1:00AM Central.

Zerohedge reports Japanese Government Bonds Halted Limit Down; Yields Spike To 10 Week High; Worst Day In 5 Years.

Prime Minister Shinzo Abe is playing not with matches but with dynamite with his 2% inflation mandate widely known as “Abenomics”. So far, Abe’s policies are popular (at least from exporters), yet I caution once again “Be Careful of What You Ask, You May Get It”.

There is no reason at all to believe Japan can easily contain this mess should inflation get out of hand. A mere rise in interest rates to 3% would consume Japan’s entire tax revenue just on interest on its national debt.

This will not end well for Japan.

Mike “Mish” Shedlock