Tokyo cannot raise yields without blowing up its budget and cannot hold them down without crushing the yen and investors are piling into the debasement trade

Japan's government says it may "intervene" before the Japanese Yen to US Dollar ratio reaches 160. Over the last 2 months, the Yen has gone from 145 to 157 as a $110B+ stimulus package is coming
byu/RobertBartus inEconomyCharts

This is where the “debasement trade” comes from. Japan’s debt at 240% of GDP leaves no good options. If Japan stabilizes the Yen by allowing yields to rise, there’s a fiscal crisis. If it keeps rates low, the Yen goes back into a devaluation spiral. Too much debt is a killer…


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