Japan Might Be A Bomb Ready To Explode-- Why You Should Care

Summary

• Japan’s 229% Debt/GDP ratio, once sustainable via yield curve control, now faces crisis as inflation and rising rates end this policy era.
• With the Bank of Japan turning hawkish and long-term yields climbing toward 2%, debt servicing costs threaten fiscal stability and economic recovery.
• The yen’s depreciation has fueled imported inflation, while GDP contraction and weak household sentiment highlight deep structural vulnerabilities.
• Potential ripple effects include global bond market pessimism, reduced Japanese flows into US assets, and upward pressure on US Treasury yields.