Synopsis
For decades, the Bank of Japan has relied on near-zero rates to rescue its economy. Investors typically borrowed money in Japan at near-zero rates to invest in high-yield assets such as the USD. The Japanese economy is now out of deflationary territory. Will BoJ abandon near-zero rates? Any disruption in the carry trade could mean a potential black swan event.
Buffett’s Big Japan Bet. Pink papers, hedge funds, brokerages have all called it that and analysed its efficacy, logic, and timing. It is a big talking point. To be clear, early this year, Warren Buffett’s Berkshire Hathaway increased stake in five general trading companies of Japan whose sizeable income is through commodity trading. These include Mitsubishi Corp, Mitsui, and Sumitomo. Berkshire made the first purchase in 2020. Some of these
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