Japan’s Rising Yields Threaten The World’s Easy Deficit Funding Model

Key Points Japan’s higher long-term yields weaken the “cheap yen” engine behind global carry trades. Japanese investors hold about $1.20 trillion in U.S. Treasuries, so shifts can lift global rates. Brazil gains when yen liquidity supports the real, and faces pressure when that flow reverses. For decades, Japan acted as a quiet backstop for global […]