A Japanese Crisis Nears | Zero Hedge:
In the next two months, it's expected the Prime Minister Shinzo Abe will make a decision on whether to increase Japan's consumption tax from 5% to 8% in April next year. If approved, consumer spending will take significant hit and given that it accounts for around 60% of GDP, hopes for an economic recovery could be dashed. If the tax hike is delayed on the other hand, rating agencies are likely to downgrade Japanese debt, resulting in increased interest costs - the last thing that the massively indebted country needs. International investors would also lose faith in Japan's turnaround strategy. Either way, it appears a lose-lose situation.
"The yen. Ah, the simplest way to short Japan is via shorting the yen. Government intervention is limited. The government needs a low yen for import prices to rise and induce inflation. My bet is that the government will get more than it bargains for. That is, a debt crisis will result in the yen spiralling a lot lower than it wants, and quickly."
'via Blog this'
