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Forex Flash: Japan national debt at risk if current account worsens - Commerzbank

By FXstreet.com,  January 11, 2013, 06:20:00 AM EDT

FXstreet.com (Barcelona) - Commerzbank analysts believe the market is skeptical regarding the measures taken by the new Japanese government, agreeing a major spending programme of approx. EUR 90bn and supposed to create 2% of real growth and 600K new jobs. "The FX market clearly doubts whether Abe's first major initiative will have any effect apart from further increasing Japanese national debt", wrote analyst Lutz Karpowitz, pointing to national debt as market focus after today's Japan current account report, from Y414B surplus to Y225B in November. " Even though the current account remains in the black the surplus is falling unmistakably", added Karpowitz. "Should the current account slide into the minus, Tokyo would be dependent on foreign investors and would probably have to pay higher interest for its gigantic national debt of more than 200 percent of GDP", he concluded.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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