BOJ 🇯🇵 not an expert but always learning from blogs / posts
quick one in very layman words for young people starting journey 👉
BONDS YIELDS INTEREST-RATE YCC UST JGB CARRYTRADE etc looks in wiki/investopedia - newbies
Why has the U.S stepped in and started actively buying the Japanese Yen?
Here is is explained simply:
The Japanese Yen just hit a 40-year low-
And Japan is the largest holder of U.S treasuries.
To strengthen the yen, Japan sells foreign currencies (U.S. treasuries) and uses the proceeds to buy yen.
If Japan were forced to liquidate a meaningful portion of its Treasury holdings to fund continued intervention, that level of selling will undoubtedly push Treasury prices lower and yields higher.
Of course, U.S. borrowing costs are already under pressure.
55 years TABLES HAS TURNED WITH -$40T DEBT BLACKHOLE
The 30-year Treasury yield just climbed above 5.2%, which is its highest level since 2007.
At the same time, roughly one-third of U.S. government debt must be refinanced within the next year.
The government will have to roll trillions of dollars of debt at today’s much higher interest rates...
By buying yen alongside Japan, the U.S. is trying to stabilize the currency before Japan is forced to sell even more Treasuries and drive American borrowing costs higher.
The yen may be Japan’s currency, but its collapse would quickly become an American interest-rate problem.
Those u OLD n know history
In 1971, Treasury Secretary John Connally famously remarked how the US dollar was "our currency, but your problem," referring to how the US dollar was managed primarily for the US' interests despite it being the currency primarily used in global reserve currency for trade settlements at the time .
Then came Nixon Shock.
John Connally was the Texas governor who was wounded during the assassination of President John F. Kennedy on November 22, 1963, while riding in the same limousine.