{"id":195739,"date":"2010-01-18T12:32:00","date_gmt":"2010-01-18T17:32:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/credit-suisse-the-japanese-yen-is-dying-2010-1"},"modified":"2010-01-18T12:32:00","modified_gmt":"2010-01-18T17:32:00","slug":"credit-suisse-sovereign-default-risks-aligning-to-crush-the-japanese-yen","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/195739","title":{"rendered":"Credit Suisse: Sovereign Default Risks Aligning To Crush The Japanese Yen"},"content":{"rendered":"<p><div style=\"float: left; padding: 15px 15px 15px 0;\">\n<script type=\"text\/javascript\">\/\/ <![CDATA[\ntweetmeme_source = 'moneygame'; tweetmeme_service = 'bit.ly';\n\/\/ ]]><\/script><br \/>\n<script src=\"http:\/\/tweetmeme.com\/i\/scripts\/button.js\" type=\"text\/javascript\"><\/script>\n<\/div>\n<p>Credit Suisse sees far too many reasons to short the yen these days, in a global equity strategy report from January 11th. First of all, they find the Yen nearly 25% over-valued on purchasing-power-parity basis (PPP) vs. the U.S. dollar. Secondly, they point to Japan&#8217;s even more rapidly deteriorating government debt situation. Thirdly, they highlight recent political pressures to weaken the yen in a bid to help exports. It would also be a &#8216;stealth default&#8217; on government debt obligations.<\/p>\n<p>Then fourthly, they show the chart below. The credit default swap (CDS) market has lost a lot of confidence in Japan. Note how the credit default swap spread for Japanese sovereign debt has doubled since mid-2009, meaning the cost to insure Japanese government debt against potential default has soared.<\/p>\n<p style=\"padding-left: 30px;\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4b54987800000000008629de-550-\/chart.png\" border=\"0\" alt=\"Chart\" width=\"550\" \/><\/p>\n<p style=\"padding-left: 30px;\"><span style=\"text-decoration: underline;\">Credit Suisse:<\/span> The fiscal position is extremely poor: With gross government debt to GDP of 197% (net government debt is 105% of GDP) and real rates almost two percentage points above the trend real GDP growth rate (2.4% versus 0.5%), a primary budget surplus of about 3% of GDP is required in order for the country to avoid being on an explosive debt path. However, the government runs a cyclically-adjusted budget deficit of 5.4% of GDP. This implies that fiscal tightening of more than 8% of GDP is required to avoid being on an explosive debt path.<\/p>\n<p><em>(Via Credit Suisse, Global Equity Strategy, Currency and equity investment implications, 11 January 2010)<\/em><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/credit-suisse-the-japanese-yen-is-dying-2010-1#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><b>See Also:<\/b><\/p>\n<ul>\n<li><a href=\"http:\/\/www.businessinsider.com\/japans-new-kamikaze-finance-minister-is-on-a-mission-to-blow-up-the-yen-and-finally-let-the-nikkei-surge-2010-1\">Japan&#8217;s New Kamikaze Finance Minister Is On A Mission To Blow Up The Yen, And Finally Let The Nikkei Surge<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/morgan-stanley-yen-intervention-risk-rising-2009-12\">Morgan Stanley: Yen Intervention Risk Rising<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/japanese-yen-on-a-tear-2009-11\">Japanese Yen On A Tear<\/a><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/Bbjw5lxcGaY\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Credit Suisse sees far too many reasons to short the yen these days, in a global equity strategy report from January 11th. First of all, they find the Yen nearly 25% over-valued on purchasing-power-parity basis (PPP) vs. the U.S. dollar. Secondly, they point to Japan&#8217;s even more rapidly deteriorating government debt situation. Thirdly, they highlight [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-195739","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/195739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=195739"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/195739\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=195739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=195739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=195739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}