Japan’s economy is increasingly viewed as a potential weak link in the global financial system, with risks stemming from its high debt-to-GDP ratio of nearly 250%, an aging population where 30% are over 65, and decades of sluggish growth. Rising inflation has further strained the economy, driving up costs of essential goods like rice. The most pressing concern lies in Japan’s bond market, where yields on 30-year government bonds exceeded 3% in May 2025, while 40-year bonds reached a record 3.6%. This pressure could trigger a global financial crisis reminiscent of 2008. For years, Japan’s near-zero interest rates fueled the “yen carry trade,” allowing investors to borrow yen cheaply and invest in higher-yielding assets abroad. However, the Bank of Japan’s decision in 2024 to raise rates to 0.25%—the highest since 2007—has disrupted this mechanism. Amidst growing instability, Bitcoin and cryptocurrencies are emerging as alternative assets. Japanese firms like Metaplanet are adopting strategies similar to MicroStrategy’s, leveraging debt to purchase Bitcoin. Additionally, Japanese legislator Satoshi Hamada proposed creating a national Bitcoin reserve to hedge against economic risks. These developments reflect a broader shift away from traditional financial systems. “— new from investx.fr
