Market Mover Il termometro giapponese
Jul 18, 2025
As Japan approaches elections, bond yields are surging, causing a wave of selling in state securities. This trend could significantly shake up both domestic and global markets. The podcast analyzes the rising public debt and tax policies, revealing tensions as interest rates near 3%. It delves into the Bank of Japan's careful stance on interest rates and its implications for currency markets. Additionally, the podcast discusses the impact of U.S.-EU tariff negotiations on investor sentiment and highlights Japanese stocks as crucial indicators.
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Japan's Bond Market Is Systemic
- Japanese government bonds are systemic due to Japan holding the largest treasury debt globally, worth over 1,100 billion dollars.
- Changes in Japanese bond yields can significantly impact global financial markets because of political promises around taxation and public finance sustainability.
Tax Cuts Worsen Japan's Debt Stress
- Proposals for widespread tax cuts in Japan, a country with already high public debt exceeding 200% GDP, increase tension in its bond market.
- This has led to the 30-year Japanese bond yield surpassing 3%, a level previously considered unlikely.
BOJ's Cautious Monetary Policy Shift
- The Bank of Japan (BOJ) is gradually raising interest rates but remains cautious due to financial market turbulence.
- BOJ plans to slow down its bond purchase reductions next April to prevent worsening market instability.