@Brad_Setser: Japan should announce a plan w...
@Brad_Setser
35 views
Jan 21, 2026
1
Japan should announce a plan where it uses the interest income on the MoF's considerable holdings of US assets (in their reserve portfolio) to buyback the long end of the Japanese curve.
1/
1/
View Tweet
2
MoF realizes a tiny fraction of the massive gain on its reserve portfolio (ought at 80-100 JPY to the USD) -- win for JP's taxpayer
and MoF buybacks a portion of its nominal debt stock at a massive discount (another win for JP's taxpayer)
2/
and MoF buybacks a portion of its nominal debt stock at a massive discount (another win for JP's taxpayer)
2/
3
Huge fan of Mr. Arnold's twitter feed by the way --
But no country with $2 trillion (MOF + GPIF) in sovereign foreign assets and a postal savings bank that holds more foreign than domestic assets is going bust ...
3/
But no country with $2 trillion (MOF + GPIF) in sovereign foreign assets and a postal savings bank that holds more foreign than domestic assets is going bust ...
3/
4
Sorry doomers. Gotta learn the BoP not just fiscal
(applies to the IMF too ... )
4/4
(applies to the IMF too ... )
4/4
5
Think my friend Robin gets the end game here wrong -- my bet is the Japanese turn Postbank back into a captive source of demand for JGBs and the GPIF reallocates back into JGBS (at a massive profit) and the MoF reduces its fx reserves v GDP. 100% different impact on the yen
View Tweet