Will Kaohsiung create an Asian version of the 'Truss Shock'?
In 2022, former UK Prime Minister Liz Truss proposed a large-scale tax cut plan without fiscal support.
This led to a sell-off of UK government bonds, a plunge in the pound, and a pension liquidity crisis, known as the 'Truss Shock'. Due to the similar easing proposals presented by Kaohsiung this time, there are concerns in Japan about whether it will repeat the UK's predicament from that year.
UBS believes that these two scenarios still have differences in fundamentals and market reactions. Japan has a large overseas asset base, which includes a net international investment position (NIIP) that accounts for 92% of its GDP and a current account surplus that makes up 4.8% of its GDP.
Additionally, Japan's interest rate-sensitive sectors such as real estate and construction have shown strong performance recently, indicating that the market does not have systemic doubts about Japan's sovereign credit. #币安将上线特斯拉股票永续合约 #美联储利率决议 $BNB
In 2022, former UK Prime Minister Liz Truss proposed a large-scale tax cut plan without fiscal support.
This led to a sell-off of UK government bonds, a plunge in the pound, and a pension liquidity crisis, known as the 'Truss Shock'. Due to the similar easing proposals presented by Kaohsiung this time, there are concerns in Japan about whether it will repeat the UK's predicament from that year.
UBS believes that these two scenarios still have differences in fundamentals and market reactions. Japan has a large overseas asset base, which includes a net international investment position (NIIP) that accounts for 92% of its GDP and a current account surplus that makes up 4.8% of its GDP.
Additionally, Japan's interest rate-sensitive sectors such as real estate and construction have shown strong performance recently, indicating that the market does not have systemic doubts about Japan's sovereign credit. #币安将上线特斯拉股票永续合约 #美联储利率决议 $BNB