Staying sane
Kim Can Disturb Japan's Zen, Not Yen
Japan's overseas assets exceed liabilities by $3 trillion, and the carry trade is unwinding.
This article is for subscribers only.
Financial markets are often irrational, though the yen's rise, seemingly in defiance of North Korean nuclear missiles flying over Japan, is a sane response by traders to a madman's threats.
To see why Sunday's hydrogen bomb test by Pyongyang will further enhance the Japanese currency's appeal, consider this chart, which shows cumulative purchases of foreign bonds and stocks by Japanese life insurance companies. That's 26 trillion yen ($237 billion) in assets that could be sold off and brought home, should there be outsized claims.