Japan

Forget China; Japan Is 'Taking Over' The World Again

Zero Hedge.

16 October, 2012

The Japanese Yen has been one of the strongest currencies among the developed nations of the world since the end of LTRO (up 6%).

This strength (repatriation flows and or carry unwind?) combined with a dismal domestic economic growth environment appears to have pushed Japanese firms to spend spend spend for growth. 

The latest and greatest Softbank/Sprint deal will shift this year's Japanese corporate acquisition of foreign companies to near-record levels. As Bloomberg Briefs notes, this will be the country's largest overseas acquisition on record - exceeding Japan Tobacco's $19bn acquisition of the UK's Gallaher Group in 2007. 

However, this growth-buying-spree does not come cheap as ratings are under pressure and while LBO-style financing might make the deal 'cheap' at first, at some point the cycle will re-emerge; but for now - it appears the BoJ (who we are sure are watching intently) should maybe leave intervention off the table until Japan owns it all again and becomes even more too-bigger-to-fail.