Brilliantly argued distinction between tightening vs fiscal distress. The yen/JGB yield divergence is exactly the tell most analysts are overlooking. One thing Iam wrestling with is whether the BoJ's performative hawkishness actually accelerates the crisis paradox or delays it, since market particpants might price in more normalization than Japan can actually deliver. Either way, selective rotation into quality US growth makes total sense given the capital flight dynamics you laid out.
Great part 2 Bill. The real losers are the people of Japan. Rather than voting for false promises of reduced tourists flooding streets, the people should revolt against the Yen Carry. Maybe I will see it in this lifetime?
And after the big BOJ meeting, markets will open tomorrow Dec. 22nd with USDJPY at 157 👏
Brilliantly argued distinction between tightening vs fiscal distress. The yen/JGB yield divergence is exactly the tell most analysts are overlooking. One thing Iam wrestling with is whether the BoJ's performative hawkishness actually accelerates the crisis paradox or delays it, since market particpants might price in more normalization than Japan can actually deliver. Either way, selective rotation into quality US growth makes total sense given the capital flight dynamics you laid out.
Great part 2 Bill. The real losers are the people of Japan. Rather than voting for false promises of reduced tourists flooding streets, the people should revolt against the Yen Carry. Maybe I will see it in this lifetime?