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Hard to get warm and fuzzy about Japan at these levels
5/14/2013 8:21:00 AM
By: Emerging Money
Hard to feel good about the level of move we have seen in Japan relative to itself. Sure, only a 25bp move in the Japanese 10yr JGBs but this is from 0.60% yield to 0.85% yield and it happened in 3 days.[caption id="attachment_64174" align="alignright" width="300" caption="The Nikkei 225, aka the Tokyo Stock Exchange"] [/caption]
This is a 40% move higher in yields for people who are investing in JGBs and for a government who is funding these instruments. What does it tell you about appetite for the world's 2nd largest bond market?
Economics will be very dangerous if they can't keep yields down. Japanese ( EWJ , quote ) corporates are complaining about the import costs of their manufacturing.
Fujitsu and Cannon were on the tape talking about the impact of the weaker Yen on their profitability.
There is no free lunch so get your snacks squirreled away.