Yen went on a free fall to a 24 year low yesterday. It is the third largest fiat currency in the world. Japan is also the largest holder of US treasuries.
Yen went on a free fall to a 24 year low yesterday. It is the third largest fiat currency in the world. Japan is also the largest holder of US treasuries.
They aren't doing what western countries are doing and it's spooking investors.
Bank of japan is trying to control the interest rate of bonds by buying bonds from the open market. This increase the supply of money which can cause inflation. This worry is probably what is causing the line to go down. It may be justified, it may not be, it's a crazy time and nobody can know what will happen.
So here's the thing, even if Japan loses their interest rate peg and yield curves go out of control, it may not even matter. People claim that yield curves are predictive of a recession but theres no real reason for it.
BOJ has an unlimited bond buying policy. I guess the problem is that a lot of Japan's debt/trade/holdings isn't in their own currency? I didn't really look into it yet.