The Great Japan Trade That Everyone’s Been Waiting For Still Hasn’t Happened

• Tweet
• Pin It

We’ve been writing so much about Japan, and the decline of the yen and so forth that you might be mistaken if you thought that the great “Japan trade” that hedge funds have been waiting around for years to play has become reality.

The answer is: Not really.

As Richard Barley at WSJ’s Heart On The Street notes, the real “widowmaker” is shorting Japanese Government Bonds. That’s the big kahuna trade that folks for years have been expecting will one day create some trader untold fortunes. You know the theory: Japanese government debt is over 200% of GDP, and one way those bonds will explode in the Keynesian endgame.

Sure, some traders have made a lot of money on the decline in the yen, but the Nikkei has been on a tear, and this isn’t actually the hallmark of an economy going into a watershed collapse.

And in the meantime, Japanese bond yields have been pretty flat.

So remember, for all the talk about the big turn in Japan, the core idea that people have had for a long time still hasn’t come to fruition.

Please follow Money Game on Twitter and Facebook.

Join the conversation about this story »

Clusterstock

Related Posts

• DEAR CLASS OF 2013: YOU’VE BEEN SCAMMED
  DEAR CLASS OF 2013: YOU’VE BEEN SCAMMED
• Champion Japan Spring/Summer 2013 Lookbook
  Champion Japan Spring/Summer 2013 Lookbook
• Elsewhere In The World: Buckets Of KFC Are Being Smuggled Into Gaza, Man Says Eating KFC “Has Been A Dream”
  Elsewhere In The World: Buckets Of KFC Are Being Smuggled Into Gaza, Man Says Eating KFC “Has Been A Dream”
• Alien Nation: Have Humans Been Abducted by Extraterrestrials?
  Alien Nation: Have Humans Been Abducted by Extraterrestrials?