Submission statement: As Japan approaches a general election for its lower house on February 8, Prime Minister Sanae Takaichi is in an eerily similar situation to Liz Truss of the UK before she was ousted. Takaichi (like most other political parties in Japan) has proposed massive government stimulus through tax cuts and spending increases to drive up the economy. Bond markets are reacting negatively, with "yields on 40-year Japanese government bonds [shooting] above the 4% threshold on Tuesday for the first time since the ultra-long maturity’s debut in 2007. Yields on 10- and 20-year bonds [have] also surged," so it'll be interesting to see how this unfolds in the next two weeks.
Posted by Better_Valuable_3242
3 Comments
Can Japan even have a run on the yen if the currency is free floating and most of the debt is interior?
I still need someone to explain why Japan’s bond yields rising to a higher level on the back of 3% inflation expected from here onwards is somehow a bad thing. Like I agree that a persistent upswing in yields that continues past a certain point is bad, but for the longest time policymakers in Japan have tried to get yields to rise to no avail.
https://preview.redd.it/gktiyu2nbseg1.jpeg?width=1061&format=pjpg&auto=webp&s=83c6ff9fe96b7996c5617c58973f0b1843416633