Hello everyone!
Today we will talk about the financial market of Japan.
So, I think many have noticed the unstoppable fall of the yen, in 2 months we have seen a drop of by more than 12% against the US dollar. Now the yield on 10-year Japanese bonds is at 0.25, it seems that this is a very small yield, however, this is the maximum for the last 6 years, and moreover, such indicators seriously worry the Central Bank of Japan, and the fact is that Japan's public debt is 250% of GDP - it needs to be serviced - this is the problem when you need to pay more by 0.25% with such a public debt - these are monstrous figures .
The ultra-soft PREP of the Central Bank of Japan with impending rate hikes in the US and leads to the growth of USDJPY to the highest in the last 20 years! But the Japanese will still face problems, because in order to restrain the growth in yields, the Central Bank is forced to print more money, they cannot stop the printing press, because with a greater increase in yields, it will be impossible to pay the national debt, but in this case the yen will continue to fall and inflationary pressure will increase. Let me remind you that the Japanese economy is heavily dependent on imports of raw materials, and prices for raw materials have increased significantly since 2002... The Japanese can only count on falling markets, with such falls, many begin to store money in protective assets, which can lead to a strengthening of the yen.
Today we will talk about the financial market of Japan.
So, I think many have noticed the unstoppable fall of the yen, in 2 months we have seen a drop of by more than 12% against the US dollar. Now the yield on 10-year Japanese bonds is at 0.25, it seems that this is a very small yield, however, this is the maximum for the last 6 years, and moreover, such indicators seriously worry the Central Bank of Japan, and the fact is that Japan's public debt is 250% of GDP - it needs to be serviced - this is the problem when you need to pay more by 0.25% with such a public debt - these are monstrous figures .
The ultra-soft PREP of the Central Bank of Japan with impending rate hikes in the US and leads to the growth of USDJPY to the highest in the last 20 years! But the Japanese will still face problems, because in order to restrain the growth in yields, the Central Bank is forced to print more money, they cannot stop the printing press, because with a greater increase in yields, it will be impossible to pay the national debt, but in this case the yen will continue to fall and inflationary pressure will increase. Let me remind you that the Japanese economy is heavily dependent on imports of raw materials, and prices for raw materials have increased significantly since 2002... The Japanese can only count on falling markets, with such falls, many begin to store money in protective assets, which can lead to a strengthening of the yen.
