I think Japanese conglomerates have more power than we expected on resisting shifting policies.

Expand full comment

Good question! My view is that Japan Inc. faces an existential economic threat from Chinese having upgraded their industry - it's quite notable that the most recent period of extended Yen weakness coincides with China having overtaken Japan as the largest auto exporter in the world.


It's one thing to cede steel, textiles or shipping to China, but the auto industry is something else entirely.

Since Japan can't compete on its technical excellence alone anymore, it has to compete on price. This means.... Yen devaluation!

In other words, I don't expect the Yen to rally meaningfully until Toyota and co regain their technical edge. Solid state batteries, anyone?

Until then, enjoy Yen funded carry trades!

Expand full comment

Japan is a bug in search of a windshield

Expand full comment


Expand full comment