Japan has always been the main "loyal buyer" of US Treasury bonds. In 20 10, Japan purchased130 billion US dollars of US Treasury bonds, most of which came from the national trade surplus. Most of the holders of these bonds are Japanese private sector, such as Japanese insurance companies and banks. Now, the United States is in a debt crisis, and the question is once again raised: Will Japan sell its US debt? At present, the attitude of most fund managers in Japan is that due to the relationship between Japanese and American debt and exchange rate, once there is a problem with American debt, it will directly implicate Japanese bond market and foreign exchange market, and selling American debt is not the best way. In fact, even after the earthquake in March, Japanese financial institutions were in urgent need of cash flow, and they did not choose to give up American debt.
Japan's foreign exchange reserves have only increased by 4% this year, mainly because private institutions have bought US Treasury bonds. According to the domestic and foreign securities investment report released by the Japanese Ministry of Finance, Japanese investors have bought 1 3.5 trillion yen of foreign bonds (medium-and long-term bonds and short-term bonds) from 1 to 1 this year, which has increased by more than1times.
So the next time Eric Rosengray says that the bond market is too pessimistic about economic growth or that the Fed's behavior is frightening, let him accuse those Keynesian fools in Japan of abandoning Japanese government bonds and buying American government bonds for the sake of yield. If Eric really wants to know what's wrong with his bond market, then he should try a negative interest rate policy, as Yellen said, which has been put on the agenda.