TJ,
>>In the event of a rise in JGB yields, Japanese banks may need to cut their
>>foreign credit lines. For example, analysis in the IMF Spillover Report for
>>Japan indicates that in an extreme shock (e.g., a 450 basis point increase)
>>would cut Japan’s credit to foreign borrowers by close to 50 percent,
>>assuming that foreign loans are cut first. G-20 economies, notably the U.K.
>> and Korea, would be among the most exposed to the loss in funding.
Very good post. If the Japanese banks cut their foreign credit lines, the overall global cost of funding to UK, Korea and France will rise significantly. As a result, Japanese exports to the UK and Europe will decline due to the loss of credit lines.
Japan will still survive even if its exports to UK, Korea and Europe drop substantially. The Japanese people are very resilient.Didn't Japan defeat Russia sometime ago? If Japanese - China relations continue to improve, Japan can export more to China. The only impediment to Japanese - China relations is the huge oil and gas reserves in East Asia that China and Japan both want to explore. Hopefully, a Japan - China compromise can negotiated over these hotly contested oil and gas reserves , which are rumored to be big as Saudi Arabia's oil reserves.
One way for Japanese and Chinese relations to improve is to have Japanese Army and Chinese army hold joint military exercises.
How are Erita and Jack doing? Thank you |
