- cross-posted to:
- worldnews@lemmygrad.ml
- worldnews@lemmy.ml
- cross-posted to:
- worldnews@lemmygrad.ml
- worldnews@lemmy.ml
https://archive.ph/3YWL7
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"A great empire, like a great cake, is most easily diminished at the edges"
The stock market is just captialist astrology, isn't it?
"Diverging monetary policies in Japan versus the U.S. and Europe are behind speculators' moves, he said. The yen's appreciation is contributing to the sell-off, he said."
I don't understand this area of economics and everytime I think I learn something it seems be proven incorrect shortly after.
I believed Japan was facing pressure to raise interest rates in line with other nations. Now it's done that and the yen is starting to recover it's monetary policy is divergent again causing a stock sell-off?
I'm tired of my income turning into monopoly money whenever I think about going abroad.
Yen carry trade unwind. People were discussing this at least since around 2008. So basically people borrow yen for free/next to free and speculate in anything that was going to get them returns. I personally always thought the yen would inflate to unbearable levels along with the USD but it looks like they're actually doing something about it.
So Japan is expected to keep it's interest rates at or below zero to allow the yen to be used for speculation.
But during economic crises where other major economies raise interest rates it's also expected to do the same or face devaluation of the yen?
I'm more interested in the yen finally starting to recover from it's steep decline than I am in the value of the stock market.
Japan is a huge holder of US debt
As of April 2024, the five countries owning the most US debt are Japan ($1.1 trillion), China ($749.0 billion), the United Kingdom ($690.2 billion), Luxembourg ($373.5 billion), and Canada ($328.7 billion).
Investors from Russia, China, and Indonesia had sharp drops in US Treasurys over the last several years due to sanctions and short-term capital needs, among other reasons.
I'm not super confident on this but I don't think it's USA markets bad -> Japan markets worse
It's Japan market goes bad because new thing (yen rate) -> USA markets worse
Except right now we're only on the Japan market bad part and not the USA part because it's still the weekend
If what people are saying is true, people who have borrowed the yen likely invested in US securities and since the yen is going up + 0 -> .25% interest rates, those invested US securities will have to be sold off to cover the appreciated yen loan
