Takeo Hoshi Quoted on U.S. Financial Forecasts
This Time, Maybe the U.S. Is Japan
08/12/2011
Matt Phillips and Justin Lahart,
The Wall Street Journal
It is a comparison that underlines the current plight of the U.S. economy: as bond investors grapple with their new reality—a downgraded U.S. credit rating and two more years of zero-interest rates—they are increasingly looking to Japan for guidance.
Since Standard & Poor's stripped the U.S. of its triple-A credit rating on Aug. 5 and the Federal Reserve followed on Tuesday with a statement that interest rates will be at near-zero until at least mid-2013, bond traders have been recasting their models. Many have been using the experience of Japan, which was first downgraded from triple-A in 1998 and has had near-zero rates for the better part of a decade.
It is an analogy others have tried to apply before, but traders and investors say the similarities between the two countries have never been more apparent.
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Takeo Hoshi can provide commentary on Japan's financial system, bank regulation, macroeconomic conditions and macroeconomic policy.
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