x
"Japan's bond market is in revolt. Yields just hit their highest since 2008, the yen is in freefall, and the new Prime Minister's response was to borrow another $135 billion. It’s the world’s largest creditor nation - but what happens when Japan needs its money back?"
~ Coin Bureau
Japan's decades-long defiance of gravity, where it accumulated massive debt while keeping rates near zero, appears to be ending as Japanese Government Bond yields surge to their highest levels in years. This shift is fuelled by the new government's large-scale stimulus spending, which requires issuing more debt, creating a dynamic of "fiscal dominance" over the central bank's monetary policy. The Bank of Japan is now trapped between defending a rapidly weakening yen, which is exacerbating imported inflation, and avoiding an aggressive rate hike that would trigger a crisis by making the national debt unserviceable and causing a violent unwind of the global 'yen carry trade.' Furthermore, rising domestic yields are prompting large Japanese institutional investors, such as life insurers, to repatriate capital by selling trillions in foreign assets, including US Treasuries, which creates a slow but steady drain on global liquidity, threatens to raise US borrowing costs, and poses a significant systemic risk to global markets.
0:00 Intro
1:06 Sanae-nomics
4:51 The Bank in a Bind
8:11 I Know What Yen Did Last Summer
11:29 The Slow Money
14:21 The Exit Routes
17:56 Why This Matters For Everyone Else
21:51 When Japan Moves…
Source - Coin Bureau YouTube: https://www.youtube.com/watch?v=D-zczGOXq9s
Disclaimer: This video is provided for informational purposes only, and not offered or intended to be used as legal, tax, investment, financial, or any other advice.
