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**Executive Summary: Japan's Structural Inflection Point** Forget the false dawns of the past. Goldman Sachs declares that Japan is undergoing a genuine, durable structural awakening. Driven by an alignment of geopolitics, monetary normalization, and aggressive corporate reform, the world’s fourth-largest economy has entered a powerful new growth cycle. **1. The Macro & Geopolitical Redesign** Tokyo is quietly…
> "The emperor put it in announcing the end of the war, the nation was confronted with having to bear the unbearable." - Russell Jones [[00:05:51](https://www.youtube.com/live/KtCuKgF7g2A?si=NgQsx_2S2Z4psfOv&t=0h5m51s)] > "The Japanese yen was fixed at 360 to the dollar in 1949 and it remained there until 1971." - Russell Jones [[00:09:03](https://www.youtube.com/live/KtCuKgF7g2A?si=NgQsx_2S2Z4psfOv&t=0h9m3s)] >…
Executive Summary: Japan's Structural Inflection Point
Forget the false dawns of the past. Goldman Sachs declares that Japan is undergoing a genuine, durable structural awakening. Driven by an alignment of geopolitics, monetary normalization, and aggressive corporate reform, the world’s fourth-largest economy has entered a powerful new growth cycle.
1. The Macro & Geopolitical Redesign Tokyo is quietly…
Introduction & Macroeconomic Foundation
"While near‑term volatility in Japanese equities due to interest‑rate normalisation and political risk is possible, the structural story—driven by corporate governance reform—is creating opportunities. There is a strong case for Japan’s mid‑ and small‑cap universe, whose valuation discounts to large-cap peers should offer upside as those reforms take hold." - Vincent Mortier - Group CIO, Amundi & ***Monica…
"financial repression is a very appealing tax because the people who are being taxed actually don't know they're being taxed because it's all super complicated and you need to have at least a solid understanding of economics to even begin to understand what's going on..." - Dr. Hanno Lustig [00:00:00]
"the Japanese public sector is arguably the…
Major Positions
A large portion of our portfolio is concentrated ina small number of American companies such as Apple, American Express, Coca-Cola, and Moody’s – businesses we understand well, have a high regard for their leaders, and expect willcompound over decades.
--- Japan Investments > The same criteria apply to our investments in Japan, which we view as comparable to our…
Marc Rowan: "Japan is, in many ways, the first of the western democracies to face real aging, retirement, and high levels of government debt."
Bank balance sheet data show that yen lending to offshore financial centers and non-bank borrowers remains elevated, suggesting a large stock of yen-funded positions, see the first two charts.
By contrast, speculative futures positioning has swung sharply, highlighting that carry trades can unwind quickly even as the broader yen-funded footprint remains in place, see the third chart.
"Inside of the Japanese head, these brains like our brains can do good things or bad things all depending on the kind of ideas that are put inside." — US Occupation Film Narrator (On re-educating post-war Japan) [00:03](https://www.youtube.com/watch?v=p5Ac7ap_MAY&t=205s) "If it were not for window guidance, we would compete until harakiri." — Japanese Banker (On the necessity of the Central Bank’s…
"History has to be rewritten with the understanding of who is creating the money supply and who's buying those politicians. Otherwise historians just study the frontmen... why are they in power? Who's funded their rise? Follow the money and you find out." - Richard Werner (On the necessity of analyzing monetary origins in history) 00:00:00
" The Federal Reserve is supposed…
"The JGB 10-year, 20-year-forward rate tells a compelling story: A 373-basis-point climb since 2021 marks a structural shift in Japan’s bond market."
"Long-term buyers – insurers and pensions – have stepped back from their role as steady buyers in the super-long sector. In their place, short-term traders dominate, turning 30-year JGBs into tactical plays. The result? Heightened volatility, amplified by global…
#JPY #Yields
The old bond market adage is that 'yields will keep rising until something breaks".
In 2022/23, rising U.S. yields "broke" several banks by March 2023 (Silicon Valley Bank). Japanese yields are now at a 27-year high and going vertical. When does something "break" in Japan?
Source - Jim Bianco
Signifying loss of market confidence? #Yen #Japan
BoJ’s Policy Dilemma | The Bank of Japan is caught in a "pincer movement":
- If they keep rates low: The Yen will continue to crash against the US Dollar (currently near 160), destroying the purchasing power of Japanese households. - If they raise rates to save the Yen: They risk crashing the stock market, hurting domestic borrowers, and making…
