Why Italian And Spanish Bonds Are Near Record Low Yields (In One Greater-Fool Chart)
As global central bankers appear set on a game of inter-continental reach-around, the Japanese - printing press handle in hand - have taken the lead. For those wondering why EURJPY is so high and why, despite an endless stream of disappointingly near-record-bad macro and micro data in Spain and Italy, yields are near record lows... wonder no more. As Reuters' Jamie McGeever reports, the Japanese bought Spanish and Italian government debt at the fastest pace in 5 years. As Abe increases his militaristic presence in Asia, perhaps his 'promise' to buy any and all European peripheral debt is just the handshake he needs to pressure China (through its largest export market).
What do you do when the world is aware of the fact that domestic banks and pension funds are gorging on their own sovereign debt in a wildly systemic-risk-creating manner?
You call your friends in Asia...
We just wonder what the quid pro quo that Abe was promised for this? Remember, Draghi did says "whatever it takes!"
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