Not this time Im afraid Japan is stuck between a rock and a hard...

Not this time Im afraid Japan is stuck between a rock and a hard place as the carry trade unwinds and they were lagging behind western economies as the Covid stimulus fed into their economy.

This will be exaggerated as US cuts and Japan is forced to raise so the difference narrows and the carry trade implodes with Japan forced to sell over a trillion dollars of US bonds leading to a rush for the exits with China following suit not wanting to be left holding the baby and with over 4 trillion dollars held by overseas investors they will be lucky to catch a bid.


Japan inflation rate for 2022 was 2.50%, a 2.73% increase from 2021.
Japan inflation rate for 2021 was -0.23%, a 0.21% decline from 2020.
Japan inflation rate for 2020 was -0.03%, a 0.49% decline from 2019
Japan inflation rate for 2019 was 0.47%, a 0.52% decline from 2018.

Its currently 2.8 percent which may not seem like a lot but to a country that only recently was experiencing real negative rates its a significant problem for inflation.

Looking at the Chart the yield on the 10 year note will fall to about 3.30 percent by the end of the year getting the bulls all excited but then the repatriation of funds to overseas holders will start in earnest and yields will rise to 11 percent putting mortgages at more like 14 percent and mass repossessions.