The first thing investors check in the morning should be the Japanese government bond market, according to Peter Boockvar, chief market analyst at The Lindsey Group.
Over the last week, Japanese bond yields have flashed signs that the Bank of Japan's negative interest rate policy and bond-buying program have reached their limits, he said. The central bank may now be poised to backtrack on negative rates, which could offer investors clues about the direction of interest rates around the world, he added.
"When people go to sleep at night and they wake up, they should be looking at JGB yields because I think that's a potential canary with respect to global interest rates and would then have an impact on stocks," he told CNBC's "Squawk Box" on Monday.
Low and negative interest rates on sovereign debt have left investors searching for yield in stock markets. Higher rates typically make stocks less attractive, especially in light of a four-quarter-long U.S. corporate earnings recession and weak global economic growth.
Japan's 10-year bond yield has continued to tick higher since July despite the Bank of Japan's efforts to guide rates lower in a bid to boost its economy. On Tuesday, government data showed Japan's economy grew at just 0.2 percent on an annual basis in the second quarter and was flat from the previous quarter.
Boockvar, a CNBC contributor, noted that the recent sharp rise in the Japanese 10-year yield tracked a rise in U.S. and European interest rates. "We're all in the same bed together," he said.
The Japanese yen also defied the typical weakening that comes with rate cuts and appreciated after the BOJ guided rates into negative territory. More recently, Australia and New Zealand have seen their currencies appreciate despite their central banks lowering rates, Boockvar added.
"We're seeing continued signs of central banks losing control of the things that they want to direct, and I think that's what we should be focused on right now," he said.