【日銀利上げ×インフレ】この組み合わせが米国株を揺るがす？警戒すべきシナリオとは — Transcript

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1. 0:00They’re basically telling BOJ
2. 0:01Governor Ueda that they expect him to
3. 0:03do the right thing regarding monetary
4. 0:05policy. You don't usually say things
5. 0:07like that. In a way, you could even say
6. 0:08they’ve been backed into a corner.
7. 0:14Hello everyone, I’m Emori. This
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15. 0:26description. The BOJ raised rates,
16. 0:29didn't they?
17. 0:37>> There’s definitely some movement.
18. 0:39>> Does the US have any thoughts on this
19. 0:40recent interest rate hike?
20. 0:43>> I suppose the way to look at it is that
21. 0:45the opinions or demands coming from the
22. 0:46US side are driven by a desire to
23. 0:48prevent their own interest rates from
24. 0:50rising.
25. 0:51>> Oh, is that so? Because of this rate
26. 0:53hike, the interest rate gap between
27. 0:55Japan and the US hasn't widened all
28. 0:56that much. Yeah. But since the US is
29. 0:58also raising rates, it’s not really
30. 1:00shrinking, so it feels like things
31. 1:01aren't exactly going according to
32. 1:03America's intentions.
33. 1:04>> Yes. I see. Is it important to
34. 1:06understand or decipher those US
35. 1:08intentions?
36. 1:08>> Yeah. It’s extremely important. While
37. 1:10these interest rates and the like are
38. 1:12basically determined by the market, in
39. 1:14the past, whenever we reached a major
40. 1:16turning point, politics was always
41. 1:17involved. Interest rate levels, and
42. 1:20even exchange rate levels, have changed
43. 1:22significantly due to political agendas.
44. 1:25So, I think it’s necessary to grasp
45. 1:27how both Tokyo and Washington are
46. 1:29thinking about this. I see. I’d like
47. 1:32you to explain what this BOJ rate hike
48. 1:34means going forward, while
49. 1:36incorporating the perspective from the
50. 1:37US as well.
51. 1:39>> Sure. Yes.
52. 1:43>> So, regarding this recent rate hike,
53. 1:44there have been various voices coming
54. 1:46from the US side as well. While
55. 1:49touching on that, I'd like to discuss
56. 1:50how the Japanese financial authorities
57. 1:52are viewing things now, but what's
58. 1:54really happening is that both Japan and
59. 1:56the US have entered an era of inflation
60. 1:58after raising interest rates.
61. 1:59>> I think it's a major change that
62. 2:01signals exactly that. As you are aware,
63. 2:03in September, the Bank of Japan raised
64. 2:05its policy rate to 1.25%. That’s the
65. 2:07first time in 31 years.
66. 2:08>> 31 years is incredible, isn't it?
67. 2:10>> It really is.
68. 2:11>> It just goes to show how suppressed
69. 2:13Japanese interest rates have been until
70. 2:14now. Also, in the summary of opinions
71. 2:18from the September meeting released on
72. 2:20October 1st, multiple members suggested
73. 2:22that they should accelerate additional
74. 2:23interest rate hikes. The rate hike this
75. 2:27time wasn't just a one-off event. By
76. 2:29continuing to raise rates, we are
77. 2:30moving toward what you might call the
78. 2:32normalization of monetary policy. It
79. 2:34feels like we've entered a new phase,
80. 2:36so to speak. Now, what about the US?
81. 2:38They implemented a rate hike at the
82. 2:40September FOMC. The FF rate was raised
83. 2:42from 3.75%to 4%, and the US 10-year
84. 2:45Treasury yield has also settled into
85. 2:47the 5%range. So, while the interest
86. 2:51rate gap between Japan and the US isn't
87. 2:53narrowing quickly, it feels like it's
88. 2:55starting to shrink a little bit. So,
89. 2:58what is the current stance of the
90. 3:00financial authorities in Japan and the
91. 3:02US? Various statements are coming out
92. 3:04from different officials. However, if
93. 3:06you listen closely, it's not as simple
94. 3:08as just trying to stop the yen's
95. 3:09depreciation. They are looking to
96. 3:11correct the undervaluation of the yen.
97. 3:12In other words, they’re saying the
98. 3:14yen has become too weak and we should
99. 3:16correct that, while also urging Japan
100. 3:17to proceed with the normalization of
101. 3:19its monetary policy. As a result, they
102. 3:21want to stabilize the U.S. bond market.
103. 3:23In other words, their number one demand
104. 3:25from the U.S. perspective is to keep
105. 3:26interest rates from rising. Meanwhile,
106. 3:28Japan's Finance Minister Katayama has
107. 3:30quite clearly stated that the current
108. 3:31yen levels are a problem. Even so, the
109. 3:33policy remains not to specify any
110. 3:35concrete target level for the yen. And
111. 3:36they are also being mindful of the Bank
112. 3:38of Japan's independence. Building on
113. 3:39that, they are also maintaining
114. 3:41cooperation with the U.S., so they are
115. 3:43proceeding quite cautiously. In that
116. 3:44sense, Finance Minister Katayama is
117. 3:46very well-balanced. He doesn't say
118. 3:48anything reckless, yet he still sends
119. 3:50clear signals to the market.
120. 3:51Katayama-san is really smart, isn't he?
121. 3:53I’ve actually spoken to Katayama-san
122. 3:55directly several times. I happened to
123. 3:57be next to him at a parliamentary party
124. 3:59, and he is extremely small in stature.
125. 4:00But he speaks fast, and he is just too
126. 4:02brilliant. I think his brain just
127. 4:03processes things too quickly. After
128. 4:05talking for just a bit, I realized, "
129. 4:06Wow, this guy is something else." I
130. 4:08really understood that. It seems things
131. 4:09are being handled in a balanced way for
132. 4:11now.
133. 4:11>> I agree. I think so. What is actually
134. 4:13happening right now is a weak yen.
135. 4:15Since the yen is too weak, Japan is
136. 4:17worried about accelerating inflation,
137. 4:18so the BOJ is raising rates, and
138. 4:20Japanese interest rates are rising.
139. 4:22When that happens, what occurs is that
140. 4:23money returns to the Japanese market;
141. 4:25in other words, there is a need for a
142. 4:27repatriation of funds. There is this
143. 4:28perspective as well. Then the
144. 4:30discussion turns to whether that will
145. 4:31also affect the U.S. Treasury market. I
146. 4:34will talk about this point in more
147. 4:36detail later, but a telephone
148. 4:37conference was held between Japan and
149. 4:39the U.S. on September 25th, and they
150. 4:41share the understanding that the yen's
151. 4:43undervaluation is a problem.
152. 4:44Furthermore, they intend to strengthen
153. 4:46Japan-U.S. cooperation. What's
154. 4:48important here is not just that they
155. 4:49talked about the weak yen, but that
156. 4:51financial authorities in both Japan and
157. 4:53the US will continue to share
158. 4:54information on the currency. With this
159. 4:56system in place, the relationship
160. 4:57between the Japanese and US finance
161. 4:59ministers is now quite close. Therefore
162. 5:02, both the Japanese and US stances are
163. 5:04very clear now: they absolutely will
164. 5:06not let the yen weaken any further.
165. 5:08Even just looking at this, you really
166. 5:10shouldn't be betting on the yen's
167. 5:12decline for any kind of trading or
168. 5:13investment. It’s pointless. So, what
169. 5:15kind of statements has Treasury
170. 5:16Secretary Yellen been making? Since the
171. 5:18start of this year, she has been making
172. 5:20more pointed remarks regarding the yen.
173. 5:21In January, she said that excessive
174. 5:23exchange rate movements are not
175. 5:24desirable. She was saying things like
176. 5:26that, but on August 31st, she commented
177. 5:28on suppressed movements and told BOJ
178. 5:30Governor Ueda, "I expect you to do the
179. 5:32right thing regarding monetary policy."
180. 5:34You normally don't say that. You
181. 5:36shouldn't be telling another country's
182. 5:38central bank how to handle their
183. 5:39monetary policy—in other words, you
184. 5:40shouldn't be telling them to raise
185. 5:42interest rates. You could say they are
186. 5:44being pushed into a corner to that
187. 5:45extent. In short, if things continue
188. 5:47like this, the interest rate gap
189. 5:48between Japan and the US will remain
190. 5:49wide, the dollar will be bought, and US
191. 5:51interest rates will likely stay high.
192. 5:52The expectation is that if Japan raises
193. 5:54interest rates, the situation might
194. 5:55change and help avoid this.
195. 5:56Consequently, that brings us to
196. 5:58September 1st. Secretary Yellen held a
197. 6:00direct meeting with Governor Ueda. The
198. 6:02US Treasury Department announced that
199. 6:04during that meeting, she urged him to
200. 6:05take decisive monetary policy actions
201. 6:07to deal with the weak yen. "Decisive"
202. 6:09carries the nuance of clearly setting a
203. 6:11direction, and I feel like they've
204. 6:12really stepped into uncharted territory
205. 6:14here. I personally think this could
206. 6:16have been reported more strongly;
207. 6:18essentially, they are saying "get it
208. 6:19done." That's exactly it. So, I’ve
209. 6:21given some thought to what might be the
210. 6:23true intentions of Treasury Secretary
211. 6:24Bessent. First, to curb excessive yen
212. 6:26depreciation. And to encourage the
213. 6:27normalization of Japan's monetary
214. 6:29policy. The result would be to
215. 6:30stabilize the U.S. Treasury market and
216. 6:32prevent interest rates from rising.
217. 6:34Secretary Bessent even made a statement
218. 6:36saying that "a strong yen reflects
219. 6:38Japan’s strong economic fundamentals,
220. 6:40" implying that the exchange rate
221. 6:41should be stronger, or more precisely,
222. 6:43that a stronger yen is desirable based
223. 6:45on those fundamentals. So, what are
224. 6:47Finance Minister Katayama’s true
225. 6:49intentions? He certainly acknowledged
226. 6:51on September 29th that the yen's
227. 6:52undervaluation is a problem. He stated
228. 6:54that he won't intervene directly in the
229. 6:55currency market, but as mentioned
230. 6:57earlier, they are maintaining solid
231. 6:59communication with U.S. financial
232. 7:00authorities and the Treasury. His
233. 7:02policy stance is that he won't just
234. 7:04stand by and watch the yen weaken, but
235. 7:06he also won't manage policy with a
236. 7:07specific exchange rate target in mind;
237. 7:09however, it's clear that they won't
238. 7:11tolerate the yen going beyond 160.
239. 7:13Another point Minister Katayama is
240. 7:15emphasizing is the independence of the
241. 7:17Bank of Japan. This is where he differs
242. 7:19slightly from President Trump and
243. 7:20Treasury Secretary Bessent, as he has
244. 7:22clearly stated that monetary policy is
245. 7:24the domain of the Bank of Japan, while
246. 7:26currency matters are the responsibility
247. 7:28of the Ministry of Finance. The U.S.
248. 7:30has been sending messages that Japan
249. 7:31should pursue more monetary tightening.
250. 7:33But even so, if the Japanese government
251. 7:35were to tell the Bank of Japan to raise
252. 7:36rates, it would undermine the BOJ's
253. 7:38independence, so Mr. Katayama is
254. 7:39careful not to say that; he’s been
255. 7:41very clear on that. In terms of his
256. 7:42position, at least. That is why I
257. 7:44believe the market is not in turmoil
258. 7:46right now. So, why is Mr. Bessent
259. 7:50getting so deeply involved at this
260. 7:52stage? The answer is simple: he just
261. 7:54cannot afford to have U.S. interest
262. 7:55rates continuing to rise. The U.S.
263. 7:58wants to curb its inflation while
264. 7:59keeping Japanese interest rates low by
265. 8:01channeling sales there, but the danger
266. 8:03lies in how yen carry trades might
267. 8:05affect the situation. Right now, yen
268. 8:08carry trades are still happening, and
269. 8:10if those were to unwind, it would be
270. 8:11extreme. If that happens, what would
271. 8:13occur is a sudden surge in the yen. As
272. 8:15the yen carry trade is unwound,
273. 8:16overseas investors holding things like
274. 8:18U.S. Treasuries would have to sell off
275. 8:19those assets. And what happens then?
276. 8:21Since they’re selling U.S. Treasuries
277. 8:23, American interest rates would rise.
278. 8:24That would be a problem. This would
279. 8:26also raise U.S. funding costs, and
280. 8:28because there’s a possibility of a
281. 8:29reversal, constantly calling for a
282. 8:31stronger yen could actually end up
283. 8:33driving U.S. interest rates higher,
284. 8:34which is the real problem here. They
285. 8:37have to consider this, so simply saying
286. 8:39the U.S. should just strengthen the yen
287. 8:41carries the risk of triggering some
288. 8:43quite dangerous outcomes. Meanwhile,
289. 8:45the Bank of Japan's rate hikes may
290. 8:47start to take on a different
291. 8:48significance. Well, they have gone
292. 8:50ahead and raised rates for now. The
293. 8:51Bank of Japan is doing this to stably
294. 8:53achieve its 2%price stability target.
295. 8:57While the official story is that the
296. 8:58rate hike was to achieve that goal, it
297. 9:00also raises the cost of so-called yen
298. 9:02carry trades, where people borrow yen
299. 9:04to buy foreign assets. If that happens,
300. 9:08what will those people do? They’ll
301. 9:12have to pay back the yen they borrowed,
302. 9:13so while the Bank of Japan’s rate
303. 9:15hike acts as an inflation measure, it
304. 9:17also risks suppressing or even
305. 9:18unwinding those carry trades. When you
306. 9:22think about it that way, what is
307. 9:24Secretary Yellen's true target, really?
308. 9:26There is a direct chain reaction
309. 9:27involving the yen, Japanese government
310. 9:29bonds, U.S. Treasuries, long-term U.S.
311. 9:31interest rates, U.S. stocks, and
312. 9:32American funding costs. He's a hedge
313. 9:34fund trader, so he’s surely watching
314. 9:36that closely. While he talks about the
315. 9:39yen rate as his target, I think his
316. 9:41real focus is on the global flow of
317. 9:43capital. What he’s most concerned
318. 9:46about is money flowing out of U.S.
319. 9:47Treasury bonds. That would lead to a
320. 9:50rise in interest rates. That is his
321. 9:51primary concern. So, how can they keep
322. 9:53money from leaving the U.S. while also
323. 9:55preventing interest rates from rising?
324. 9:57If they could pull that off, they’d
325. 9:59be gods. I don’t think that’s
326. 10:00really possible. That’s why they’re
327. 10:01struggling. They are, too.
328. 10:02>> Do you mean that interest rates will
329. 10:03rise? When you say it’s impossible?
330. 10:05>> It’s impossible because interest
331. 10:06rates would end up rising. Keeping
332. 10:07rates from rising while preventing
333. 10:08money from leaving the U.S. Isn't that
334. 10:09just too difficult? And frankly, asking
335. 10:11Japan to do that for them is
336. 10:12unreasonable. That just shows how
337. 10:14desperate they are. On the other hand,
338. 10:16Japan does have some reasons for
339. 10:17wanting a stronger yen. For example,
340. 10:19curbing inflation—as prices for food
341. 10:21and energy rise, real income falls,
342. 10:23which could lead to a decline in
343. 10:25consumption. The government is
344. 10:27providing subsidies, but there’s a
345. 10:28limit to how much fiscal burden they
346. 10:30can take on. So, for the Japanese
347. 10:31government, while they don't want
348. 10:32extreme yen depreciation, they also
349. 10:34can't afford a rapid appreciation of
350. 10:36the yen, putting them in a very
351. 10:37difficult position. If the yen gets too
352. 10:39strong, corporate profits will suffer,
353. 10:41and stock prices will fall. So, rather
354. 10:43than actively pushing for a stronger
355. 10:45yen, they are using terms like an "
356. 10:46orderly market" to try to ensure things
357. 10:48don't go to the extreme of yen
358. 10:50depreciation. Considering that, I’ve
359. 10:52summarized the common interests of the
360. 10:53financial authorities in both Japan and
361. 10:55the U.S. in a table. Both sides are
362. 10:56troubled by rapid swings in the yen,
363. 10:58whether it’s depreciation or
364. 10:59appreciation. However, they both also
365. 11:00view the undervaluation of the yen as a
366. 11:02problem. Looking at this from various
367. 11:03angles, the themes—and the benefits
368. 11:05—are the same for both Japan and the
369. 11:06U.S. First, the Bank of Japan will
370. 11:08proceed with gradual interest rate
371. 11:09hikes. They want to prevent the
372. 11:10interest rate gap between Japan and the
373. 11:12US from widening. They want to keep US
374. 11:13interest rates from rising too much.
375. 11:15And so, it’s clear that both Japan
376. 11:17and the US share the goal—or rather,
377. 11:19the common interest—of trying to move
378. 11:21in a direction that avoids an
379. 11:22excessively strong dollar. On the other
380. 11:26hand, Japan's fiscal expansion has
381. 11:27perhaps become a separate issue. As I
382. 11:29just mentioned, Japan and the US
383. 11:31currently have aligned interests
384. 11:32regarding monetary policy and foreign
385. 11:34exchange. However, there is Secretary
386. 11:36Yellen. On September 1st, she actually
387. 11:39suggested that Japan should perhaps
388. 11:41stop or at least curb large-scale
389. 11:43fiscal stimulus measures. The reason
390. 11:44for this is that if fiscal policy
391. 11:46expands, more government bonds will be
392. 11:47issued. Long-term interest rates will
393. 11:49rise. This creates the possibility of
394. 11:51either a weaker or stronger yen. If
395. 11:52that happens, market volatility will
396. 11:54increase significantly. And if that
397. 11:55happens, it will have a negative impact
398. 11:57on US long-term rates as well, which is
399. 11:59likely what she is concerned about.
400. 12:00Considering that, Secretary Yellen is
401. 12:02clearly wary of a combination of a
402. 12:03weaker yen and rising Japanese interest
403. 12:05rates. Usually, one might think that
404. 12:07rising interest rates lead to a
405. 12:09stronger currency—a stronger yen—
406. 12:11but in Japan's case, fiscal expansion,
407. 12:13inflation, and increased bond issuance
408. 12:14could lead to a "bad" scenario of
409. 12:16rising Japanese rates and a weaker yen.
410. 12:19If Japanese long-term rates rise, it
411. 12:21could push up US interest rates, while
412. 12:23a weak yen and strong dollar would be
413. 12:25problematic for the US; thus, for
414. 12:27Secretary Yellen, this combination
415. 12:28could become a real headache. So, if
416. 12:31they push it too far, it becomes a
417. 12:33rather serious issue. So, I think this
418. 12:35summarizes the surface and hidden
419. 12:36meanings of the statements made just
420. 12:38now. It’s like, what is being said
421. 12:39officially versus what is actually
422. 12:41meant behind the scenes. For instance,
423. 12:42saying "the yen is undervalued is a
424. 12:44problem." On the surface, this is about
425. 12:45exchange rate stability, but it means
426. 12:47they won't ignore the weak yen. Saying
427. 12:48"a strong yen is desirable" officially
428. 12:50means that based on fundamentals, the
429. 12:51yen should be stronger. But it also
430. 12:53implies they want the yen to go higher.
431. 12:54Looking at various points like this,
432. 12:55for example, the strengthening of
433. 12:57US-Japan cooperation. On the surface,
434. 12:58it’s about coordination, but it
435. 13:00implies a request for more intervention
436. 13:01. The surface expressions are mild, but
437. 13:04the message that they want stronger
438. 13:06action is definitely coming from
439. 13:07Treasury Secretary Yellen. Therefore,
440. 13:10when watching the exchange markets from
441. 13:12now on, the Treasury Secretary's
442. 13:14statements are a key signal. When
443. 13:15phrases like "strong yen,""undervalued
444. 13:17yen,""orderly market," or "monetary
445. 13:19policy" come up, you must be careful.
446. 13:21From Finance Minister Kato, we hear
447. 13:22about "yen undervaluation,""orderly FX
448. 13:24markets," and "close coordination with
449. 13:26the US Treasury." In that sense,
450. 13:27Finance Minister Kato tends to make
451. 13:29more moderate statements. On top of
452. 13:31that, I want you to pay close attention
453. 13:33to the pace of the BOJ's additional
454. 13:34rate hikes and how the market reacts to
455. 13:36that. For investors, the biggest point
456. 13:41is the statements coming from US
457. 13:42Treasury Secretary Yellen. She clearly
458. 13:44views the yen's undervaluation as a
459. 13:46problem. The BOJ's monetary policy
460. 13:47should be normalized further, meaning
461. 13:49they should hike rates. And the
462. 13:50excessive expansion of the yen carry
463. 13:52trade. They want to curb this, but the
464. 13:53ultimate goal is to keep US interest
465. 13:55rates from rising. For the stability of
466. 13:57the American international market, from
467. 13:59Japan's perspective, the undervaluation
468. 14:00of the yen is a problem, and ultimately
469. 14:02, a weak yen is not good for Japan
470. 14:04either. While maintaining the BOJ's
471. 14:06independence and saying we will leave
472. 14:08monetary policy to them, the goal is to
473. 14:09avoid market turmoil by ensuring we
474. 14:11coordinate properly with the U.S.
475. 14:13Treasury to maintain a stable market.
476. 14:15So, what we need to watch moving
477. 14:16forward is how the dollar-yen rate and
478. 14:18the yield on the U.S. 10-year Treasury
479. 14:20note move. There are four patterns for
480. 14:21this combination. U.S. yields go up or
481. 14:23down. The dollar-yen rate goes up or
482. 14:25down. Among these combinations, the one
483. 14:27we really need to watch out for is a
484. 14:28decline in the dollar-yen rate. In
485. 14:29other words, a stronger yen and rising
486. 14:31U.S. interest rates. This combination
487. 14:33is truly the worst-case scenario for
488. 14:34the United States. Moving toward a
489. 14:36stronger yen is fine, but if the dollar
490. 14:37weakens, it causes inflation in the
491. 14:39U.S. as well. And on the other hand, if
492. 14:40U.S. 10-year yields rise, everything
493. 14:42becomes difficult, so we need to keep
494. 14:44the risk of a falling dollar-yen rate
495. 14:46and rising U.S. 10-year yields at the
496. 14:48forefront of our minds as we watch the
497. 14:50market. Today, I've explained the
498. 14:55current movements of interest rates in
499. 14:56Japan and the U.S. from the American
500. 14:58perspective.
501. 14:59>> Well, that's interesting. You hadn't
502. 15:01looked at it that way?
503. 15:02>> Yeah. When you look at it this way, you
504. 15:04realize that both Japanese and U.S.
505. 15:05authorities are thinking deeply about
506. 15:07how to avoid impacting the market,
507. 15:08particularly how to keep long-term U.S.
508. 15:10interest rates from rising. This is
509. 15:12truly the main point for Treasury
510. 15:13Secretary Yellen as well. To achieve
511. 15:15that goal, she is now talking about the
512. 15:17dollar-yen rate and even going so far
513. 15:19as to weigh in on the Bank of Japan's
514. 15:21monetary policy. The Treasury Secretary
515. 15:22even has to go as far as telling
516. 15:24Governor Ueda that he should raise
517. 15:25interest rates. That just goes to show
518. 15:27that, in a sense, the situation is
519. 15:29becoming quite urgent for the U.S. as
520. 15:30well. So, for the time being, the
521. 15:32Japanese Finance Minister is trying to
522. 15:34ensure things don't go to extremes
523. 15:36while understanding the intentions, as
524. 15:38Japan also wants to avoid excessive yen
525. 15:39depreciation. You could say that our
526. 15:41interests are aligned here. That being
527. 15:43said, I really think Finance Minister
528. 15:45Katayama is quite skilled. To prevent
529. 15:47exchange rate movements from becoming
530. 15:48excessively yen-weak, what is the best
531. 15:50approach? Since they are currently
532. 15:51engaging with the market while keeping
533. 15:53room for intervention, when looking at
534. 15:55the market from October onward, we
535. 15:56first need to watch the pace of the
536. 15:58BOJ's rate hikes and the movement of 10
537. 16:00-year yields in the US and Japan,
538. 16:01especially the US. And then, what
539. 16:02happens to the dollar-yen and the
540. 16:04unwinding of the yen carry trade when
541. 16:05the yen strengthens? The remarks from
542. 16:07Japanese and US financial authorities
543. 16:08and the possibility of coordinated
544. 16:09intervention. We should always check
545. 16:11the news to see if the conditions have
546. 16:12changed. I think it's definitely worth
547. 16:13keeping an eye on that. The important
548. 16:15thing is whether the BOJ's interest
549. 16:17rate hikes will significantly change
550. 16:18the flow of funds between Japan and the
551. 16:20US. In other words, the unwinding of
552. 16:22the yen carry trade. Indeed. When this
553. 16:24happens, various markets will collapse.
554. 16:27Whether we will be exposed to pressure
555. 16:28to sell off overseas assets and the
556. 16:30like. If that happens, the yen will
557. 16:31strengthen and the market will, of
558. 16:33course, fall into chaos, so it's a
559. 16:34question of which way it starts. For
560. 16:36instance, if the US interest rates
561. 16:38start acting up. Will selling off
562. 16:39government bonds and stocks result in
563. 16:41an unwinding of the yen carry trade and
564. 16:42a stronger yen? Or conversely, will the
565. 16:44yen suddenly surge, forcing everyone to
566. 16:46panic and sell overseas assets to pay
567. 16:47back their yen? That would lead to
568. 16:49stocks and bonds being sold, driving
569. 16:50interest rates up. It's a matter of
570. 16:52which scenario plays out. I believe
571. 16:53this will happen eventually. We don't
572. 16:55know at this stage what might trigger
573. 16:56it, but investors must recognize that
574. 16:58we are essentially sitting on a ticking
575. 17:00time bomb. I hope you share the common
576. 17:02understanding of what I discussed today
577. 17:04—that both the Japanese and U.S.
578. 17:05financial authorities are extremely
579. 17:07concerned about this—and keep that in
580. 17:09mind as you navigate the market.
581. 17:11>> Understood. Thank you.
582. 17:12>> Yes. Thank you for watching this video.
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