Why did Japan say they want 2% inflation when they are panicking with 10y bonds @ 1%?

Quote from clacy:

Japan is the perfect test run for the US. Their demographics are worse, their debt is significantly more, etc.

If Abenomics works for them, and 5 years from now they haven't imploded, it basically means the social program gravy train in the US can continue for quite some time to come.
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the difference is that debt of japan is owned by the japanese while US debt is substantially foreign owned.
 
Quote from zdreg:

the difference is that debt of japan is owned by the japanese while US debt is substantially foreign owned.
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Oooh...so sorry! Thanks for playing! But we have some nice consolation prizes for you.

preliminary-fy2012-to-whom-does-the-us-government-owe-money.png
 
JGBs starting to err towards complacency again. Insure 1MM notional ATM for $3500 for 10 days (and that includes through this Fed meeting!)... (vol is around 4.1%) Before all of this recent market turbulence, vols were at 2.5%...

(oh how I dream of 2.5% again. front puts were ~$2k/mo 1% OTM -- or 250bp/yr)

Is that enough convexity Mr. Bass?

I'm sure he's buying some strip equivalent of 2-3% OTM to get to ~100-150bp/yr. (and of course, probably playing longer end than 7yr)
 
Quote from dhpar:
imo most of the JGB will be ultimately cancelled after being bought by BOJ. the debt/GDP will go down with the difference showing up in money supply, causing real asset appreciation (i.e. paper yen depreciation). the only question is if they can keep the process stable - because if they can't they will certainly get more than what they bargained for (those 2%).
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Spot on... The Korekiyo Takahashi solution.
 
The bearish movement of UsdJpy has developed into 5 waves. The current one is a correction that is not going to last over 99.30. Stay bearish, target 90.
 

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