Japan’s debt dynamics are about to shift, buyers for government debt at current yields will dry up, and country will be faced with a serious fiscal crisis, according to a new presentation from The Intrigued Trader.We’ve heard this thesis on Japan before, from investors like Kyle Bass. But this is one of the more detailed and complete presentations on Japan’s current situation we’ve seen.
It includes details on how the government pension fund and Japan Postal Bank are likely to cut their holdings of Japanese government bonds soon. That reduction in holdings will lead to Japan’s need for more foreign funding, which could send yields spiking. And the “it can’t happen” effect that provides great opportunity for traders.
If you’re short Japan, thinking about being short Japan, or just curious about the fate of the world’s third largest economy, it’s a vital read.
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