4 Points to Consider Before Placing Your Bet on Japan
Garrick Hileman submits:
Predicting the Land of the Rising Sun’s future is a complex undertaking, and many a financier has had both their belt and suspenders handed to them from betting on Japan’s economic implosion. If you’re interested in investing in going long or short Japan, here are some of the key macro elements to keep in mind: 1) Japan (ETF: EWJ ) is a major surplus country, meaning it produces and sells much more than it consumes. Much of the savings the country generates, which have to go somewhere, have been invested at home in Japanese Government Bonds (JGBs) and abroad in U.S. dollar denominated assets. Alongside China, Japan is the second largest holder of U.S. treasury debt with as almost $1 trillion in holdings . 2) While Japan has a breathtaking 200%+ public debt/GDP ratio (the highest in the developed world), 94% of that debt is Japanese owned. What this means, basically, is Complete Story ยป
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