Re: Truth is hard to come by....EU and USA are suffering a similar predicament...
"Asset prices – its carefully constructed house of cards – would crash unceremoniously. Interest rates would soar across the spectrum. Much of Japan’s paper “wealth” would go up in smoke. And the government, which borrows nearly 50% of its total outlays, could no longer borrow. It would be reduced to where Greece is today. Only worse.
And that will never be allowed to happen. So the BOJ can’t do what Russia did. It can only jawbone the markets. It can talk of the yen-selling being “overdone.” It can regret the “rapid decline.” It can say that “excessive exchange-rate volatility is undesirable,” as a government spokesman just phrased it.
Jawboning works. Until it doesn’t. At some point, the markets want to see action. They want to see someone else buy yen. But the BOJ can’t be that buyer. It can only jawbone.
To keep the nation from descending to where Greece is, the BOJ will keep its iron fist on the government bond market. It will keep interest rates near zero. It will keep JGB prices inflated. And it will keep the government funded. It will do so by buying JGBs and handing out yen, no matter what.
The rest is secondary – the yen and the stock market, both. So when the yen begins to crash past all jawboning, there might not be much of a floor underneath it."