Japanese Yen - million mile consulting Ltd.

Singapore is following in the footsteps of Europe.
It has also welcomed the post-pandemic.
Specifically, the number of people in the city has increased.
I sometimes find it difficult to take my dog Sora for a walk.

Furthermore, people start to have nice chats outside. I am one of them.

While taking a walk with Sora, people with smiles talk to us quite often. ‘’ So cute, a boy or a girl?’’ ‘’Is he still a puppy?’’ Though I had the similar conversation over and over, I kind of enjoy these chats. I reply back to them with a smile in my face.

A World Where People Reach Out to Other’s Hearts.

I once again felt that communicating with each other through commonalities is essential. In sports, people root for the same team and share emotions. In theaters and cinemas, people gather for the same purpose. Some even spend lots of time and effort to fly all the way to meet people.

I hope many more people will come visit Japan soon and exchange hearts.

Japanese Government Bonds (JGB)- Yen

By the way, I want to share with you what Mr. Minoru Uchida. (Currency Analyst) had commented regarding the Japanese government bonds. (JGB) the other day.

Japan’s debt is more than twice the size of its GDP. It makes the top debtor among developed countries.
Fortunately, the rating is A (single A). However, given the current situation, BBB (triple-B) rating would not be out of place.

Reasons why JGBs are not downgraded to BBB

Mr. Uchida explained three main reasons.
I have also added my comment on each of them.

Current account balance is in surplus

(MAC’s comment.) I have doubts about considering current account surpluses in the private sector together with government debt.
Can afford to raise the consumption tax even more 10%→20％

(MAC’s comment.) That would be a disaster for the economy. It would be superfluous.
Have a WIll to restore the primary balance to surplus

(MAC’s comment.) Let’s say a politician makes a statement which ignores the primary balance surplus. Does that mean rating will be downgraded? Oh, that’s terrible.

Above reasons don’t seem like things that a rating agency place emphasis on evaluating.
Also, these are all fluffy. You never know when things will change. What will happen if a government official makes a problematic statement?

What if the rating downgrade to BBB? It will be a big issue. Japanese government bonds will be sold off considerably. This is not a theory or logic of whether or not JGBs will fail.

If downgraded from A to BBB

A : Risk multiplier 20%
BBB : Risk multiplier 50%

What would happen if what was A (20% risk) suddenly becomes BBB (50% risk)? Institutional investors around the world have a set limit on how much risk they can take on their asset holdings.

They cannot hold or must reduce their holdings of downgraded BBB-rated assets, which means they will mechanically sell them.

Exchange from Japanese Yen !?

First, a quick calculation. Next, the numbers are entered into the computer. Finally, they click the button to place the order. That’s all they have to do.