Japan will awaken worlds fourth-largest economy

Japanese financial markets are on the verge of increasing interest rates, marking a significant shift in people’s mindsets as the country aims to leave behind “lost” years of deflation and reawaken the world’s fourth-largest economy as an investment destination.

The Bank of Japan is likely to exit in June, with rates potentially rising to zero next week.

The symbolism is especially hefty as Japan strives to leave behind “lost” years of deflation and reawaken the world’s fourth-largest economy as an investment destination.

The most significant ramifications may occur in Japan’s 1.3 quadrillion yen ($8.7 trillion) government debt market, as a hike in central bank deposit rates would quickly drive banks’ capital out of bonds and into cash.


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