BREAKING: Japan's central bank just pulled money out of the economy faster than at any point since 2007. Japan's monetary base shrank 15.7% year over year in August, worse than the 13.5% decline economists expected. This is the Bank of Japan actively draining liquidity, mainly by letting bond holdings run off instead of reinvesting, with the average outstanding base falling from ¥554.9 trillion in July to ¥543.0 trillion in August. This is the same force behind Japan's bond market chaos. Fewer yen in the system means fewer buyers for government bonds, which is a big reason JGB yields have been hitting 31-year highs across the board. The BOJ is trying to normalize policy after over a decade of money printing, but doing it while inflation is already hot and the yen is already weak is what's turning this into a full blown crisis.