Japan's 10-year government bond yield soared to 1.948% — the highest since 2007. What's even more exaggerated is the 30-year term, with a yield of 3.44%, and the value of the bond is directly halved, evaporating by nearly 50%. 40 years? It has broken 3.70%.

For the first time since 2008, the Bank of Japan has experienced an embarrassing situation where interest expenses exceed income.

Who is bleeding? Japan's four major life insurance companies had a book loss of $67 billion, and regional banks' treasury bond holdings had a record book loss of $21.3 billion as of September 30.

There is a bigger thunder behind it: Japan's government debt is 230% of GDP, and inflation is still rising. Rate hike in December? The market gives an 80% probability. The problem is that the central bank holds 52% of the country's treasury bonds and cannot sell them at all.

Over the past three decades, global investors have relied on cheap yen arbitrage to push up various assets. Now that this money printing machine is about to turn off, how big of a wave will it make?

Wait and see.