The Turkey-Japan parallel is genuinely provocative. That chart showing yen and lira convergence in real effective terms is wild, especialy when you factor in the yield spike differential. The point about the fiscal risk premium migrating from bonds to currency because the BoJ suppresses it is a realy clean framework. I've seen similar dynamics in other captive central bank situations and the currency always ends up being the release valve.
Jan 22
at
2:10 AM
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