As the Bank of Japan is forced to retreat from decades of Yield Curve Control, a new and far more dangerous phase begins. To defend the yen and prevent a complete collapse of their own bond market, Japanese financial institutions will be forced to repatriate capital. They need to sell their foreign assets and bring the money home to buy JGBs, creating a domestic bid to replace the waning influence of the BoJ. And what is the largest and most liquid foreign asset held by Japanese institutions? The United States Treasury bond. Japan is the largest foreign holder of U.S. government debt, with over $1.1 trillion in its coffers.
Countries that were once part of the Japanese Empire:
🇯🇵 Japan
🇨🇳 China
🇰🇷 South Korea
🇰🇵 North Korea
🇹🇼 Taiwan
🇵🇭 Philippines
🇻🇳 Vietnam
🇱🇦 Laos
🇰🇭 Cambodia
🇹🇭 Thailand
🇲🇲 Myanmar
🇲🇾 Malaysia
🇸🇬 Singapore
🇮🇩 Indonesia
🇧🇳 Brunei
🇹🇱 East Timor
🇵🇬 Papua New Guinea
🇸🇧 Solomon Islands
🇫🇲 Micronesia
🇲🇭 Marshall Islands
🇵🇼 Palau
🇳🇷 Nauru
🇰🇮 Kiribati
🇷🇺 Russia