Robin Brooks
@robin_j_brooks
Senior Fellow @BrookingsInst, previously Chief Economist @IIF and Chief FX Strategist @GoldmanSachs. Opinions are my own. Email: RBrooks@brookings.edu.
234 Following 381.9K Followers
How can you explain the continuously falling Yen even though Japan's interest rates are rising? The explanation is that Japan's shadow yield - the yield markets require to compensate them for the risk of a debt crisis - is rising faster than actual yields.
Show more
The Yen is hugging 160 and rumors of another round of official intervention are building. Those interventions mean Japan has to sell Treasuries to get Dollars that it then sells to buy Yen. That pushes up US yields and adds to the rise in global yields...
Show more
Japan (lhs) and Switzerland (rhs) are polar opposites. Japan's yields keep rising, but the Yen falls anyway. Switzerland's yields go lower and lower, but the Franc just strengthens. Difference is public debt. Switzerland is at 40% of GDP. Japan at 200%...
Show more
Japan is becoming a case study for what NOT to do when you have lots of public debt. Japan is banking on official FX intervention to stop the falling Yen. This can't and won't work. $/JPY is rising back towards 160 once again. Japan is stuck in denial...
Show more
