Japan’s Prime Minister Yoshihide Suga recently announced a plan to reinvent Tokyo as a global financial hub by lowering tax rates and providing various administrative support in English to attract top foreign talent.
To help make this happen, Japan should contribute to meeting global demand and supply for capital through trading oil and gas in yen, as well as increasing yen-based loans to the Indo-Pacific, and inviting foreign companies to raise capital in Tokyo.
This oil-gas yen recycling will promote global trade and augment the recently signed Regional Comprehensive Economic Partnership that includes the 10-member Association of Southeast Asian Nations, Japan, South Korea, Australia and New Zealand.
Japan being a close ally of the U.S., a stronger supporting role for the yen to stabilize global markets should be welcomed by Washington too. In recent decades, a strong dollar — reflecting U.S. dominance in global financial and energy markets — has not only eroded U.S. competitiveness in manufacturing but has deepened the country’s chronic trade deficit. Read more…..
Chart of the Day
Investment bubbles and speculative manias have existed for as long as humans have been involved in markets. Is it possible for investors to identify emerging bubbles and then profit from their inflation?