GM! GM! The impact & fear of recession after Japan raised its interest rates!
Yen really has an influence? The capitalization is not as big as USD
Yes..TLDR:
1. Japan holds the largest US treasuries
2. They used to buy US Treasuries with 0% loans
3. Now the interest is 0.25%. It is possible that they will deleverage or take some of their funds home to Japan
4. Demand for US treasuries falls, yields fall
5. If there is a rate cut, yields will fall again and become unattractive.
6. So….
