Japanese Discomfort

Hey everyone, how's it going? I hope you're all having a wonderful evening. I stumbled upon a bit of news and I thought I could talk about it a little. It's about an unlikely source when you might not hear all that much about it, but is a very important player in the global economy and can have influence on the crypto market to some extent. I am talking about Japan, the same Japan who is a strong Ally of the rule-based society. It is also the holder of the highest amount of American debt. Previously a couple of days ago, I explained how the American national debt works. So Japan is one of those countries who buys those debts in terms of government bonds and it is the largest buyer. So when something bad happens in that part of the world. It is very much possible that it spills over to other parts of the world as well.

So there have been two distinct developments stemming from the same monetary discomfort issue in Japan. First of all, Japan has increased interest rates. Historically, Japan has had the lowest amount of interest rates which is actually near zero. So it was very much possible for people to take loans in the Japanese yen and then convert them to different currencies and hedge the market with it. There is no interest to pay. It was viable for people to take a loan as they could break even and pay them back. But an increase to that has shook a lot of feathers because the low interest rate in the first place resulted in a huge number of loans in huge amounts. So this can all snowball towards a lot of people. And at the same time Japan has scaled back in their efforts to US government debt. And as I had already explained how these things work, buying less of the US government debt will result in the fluctuation of the US dollar. And that is something investors don't like. Investors hate a volatile market so these situations can lead investors towards a safer option which is BTC. And there have been rumors about it as well.

From the outside it might not look like a big deal with Japan raising its interest rates and not buying enough government debts. But due to the things they have been doing for how long they have been doing, the sudden change in these processes can lead to unusual events.