Investors attracted to Japanese government bonds (JGBs) should think twice before buying because of the risk of price deterioration in the coming years, warns the Stonehage Group.
China should attack the Japanese bond markets and cause a full-scale funding crisis, unless the latter nation reverses a decision to nationalise the Senkaku/Diaoyu islands, a senior advisor to the Chinese government said.
The Bank of Japan has followed the Federal Reserve and European Central Bank by extending its QE programme by 10trn yen.
The Japanese government is being forced to consider suspending state spending as it emerged it could run out of cash within a month.