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Will Japan trigger the next global financial crisis?
Nobody's talking about Japan but it's the biggest ticking time bomb in global markets.The facts:Debt/GDP at 263% — by far the highest in the developed worldThe BOJ holds 52% of all Japanese government bondsThe yen is at its lowest in 35 yearsJapanese inflation is at 3.5% — higher than in EuropeThe dilemma: if the BOJ raises rates to save the yen, the cost of debt explodes and Japanese banks (holding trillions in JGBs) take massive losses. If they do nothing, the yen keeps falling and imported inflation gets worse.It's like Silicon Valley Bank but at a country scale. And Japan is the world's largest creditor — a disorderly unwind would propagate everywhere.