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The BIS ''Hidden USD Debt'' Story Explained

Market Depth

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The Japanese Insurer Needs to Roll Over Their Funding Every Year

A continuous flow of fresh new dollars from global trade growth is important to keep the system afloat. A Japanese insurance company, they're very involved in buying 10-year treasuries. They use the FX swap market to get their dollars and then buy Treasuries with it. For the last 10 years, on average, Japanese insurers have got over 100 basis points of additional yield by doing this exercise. But what happened if they're not there anymore?

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