Longtime Asia bear Kyle Bass doesn't know what's next for the Bank of Japan.
Bass, chief investment officer at Hayman Capital Management, spoke exclusively with CNBC's David Faber on "Closing Bell" from the Milken Institute's Global Conference in Beverly Hills, California, on Tuesday.
Bass said it's clear that negative interest rates aren't working for Japan. With the yield curve "as flat as a pancake," Bass said it is unclear what the next move is for BOJ Governor Haruhiko Kuroda.
"The textbooks aren't working for the academics ... I fear they're going to have to go into some sort of jubilee where the central bank just forgives the debt that they own," said Bass.
"I don't know what happens to the yield curve then. The unconventional policies aren't working, so they're going to have to go to unconventional, unconventional policies next. I don't know where that takes them," he said.