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Now that Soros has made another billion, this time from the yen, have things finally changed for Japan?

A recap: for decades now, the Nikkei and indeed the Japanese economy has languished despite having the 3rd largest GDP by country. After the Japanese asset bubble of the the late 80s, the Japanese unsuccessfully used lower interest rates to revive growth and left two lost decades. However, the Abe-trade has revived interest in the short yen/long nikkei macro trade:

Now that Japan's finance minister has explicitly set a stock market goal of 13,000 by March of this year, is this just be beginning? After all, if Bernanke said s&p 500 to 1600 in 2 months, wouldn't that be... eventful?

For reference, the quote above is from Tepper's CNBC/call from earlier this year which predicted an "explosion of greatness" for US equity markets. His reasoning included bull views on housing, autos.

(Icon source: http://blog.eventbrite.com/how-to-create-your-own-...)

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Comments (7)

  • BlackHat's picture

    tt1254:
    His reasoning included bull views on housing, autos.

    And alcohol.

    I hate victims who respect their executioners

  • frooter's picture

    Japans minister Amari, later backtracked on his stock market call. I dont think this time will be different. Citizens of Japan are losing purchasing power, oil/gas prices have SKYROCKETED, I saw a piece today, that LVMH, is raising their prices 12% in Japan, so its just a matter of time till this unravels.........although long term, this is definitely going to be a trend, its just too much damage done all at once

  • In reply to frooter
    ladubs111's picture

    jrtr8der:
    Japans minister Amari, later backtracked on his stock market call. I dont think this time will be different. Citizens of Japan are losing purchasing power, oil/gas prices have SKYROCKETED, I saw a piece today, that LVMH, is raising their prices 12% in Japan, so its just a matter of time till this unravels.........although long term, this is definitely going to be a trend, its just too much damage done all at once

    You have to consider the other end of Abe-onomics, Japanese debt. If they do get their target inflation and it somehow gets away from them they would have to up the rates more which would increase their borrowing cost. At over 200% Debt to GDP they got a shit ton of paper to roll over, 10% of their budget so far is paying off interest payments of 10 trillion yen a year vs US interest payment of 6% of budget.

  • In reply to ladubs111
    frooter's picture

    ladubs111:
    jrtr8der:
    Japans minister Amari, later backtracked on his stock market call. I dont think this time will be different. Citizens of Japan are losing purchasing power, oil/gas prices have SKYROCKETED, I saw a piece today, that LVMH, is raising their prices 12% in Japan, so its just a matter of time till this unravels.........although long term, this is definitely going to be a trend, its just too much damage done all at once

    You have to consider the other end of Abe-onomics, Japanese debt. If they do get their target inflation and it somehow gets away from them they would have to up the rates more which would increase their borrowing cost. At over 200% Debt to GDP they got a shit ton of paper to roll over, 10% of their budget so far is paying off interest payments of 10 trillion yen a year vs US interest payment of 6% of budget.

    Take a look ..."Some background: Japan has a gross debt-to-GDP ratio of about 227 percent of GDP. This is more than three times the level of the United States. But more than 100 percentage points (of GDP) of this debt is owed to the Japanese central bank (ie domestic debt). This means that the interest payments on this debt go to the government of Japan, so there is no interest burden added by this part of the debt. In fact, Japan’s net interest payments are less than 2 percent of GDP, which is a modest amount."

    Also, how long will the citzens keep ABE in office if they getting killed by inflation

  • Elllo's picture

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