Octopus tentacles

Basel committee announced this week that they are going to review Central bank to buy government bond. Accordingly the rating company Fitch downgraded Japanese bond rating to A which is humiliatingly below the China bond!

Japan is huge debt country. Their debt amount is over 1000 trillion yen (8 trillion dollar) that is 2 times against GDP. However the market is very quiet as it is well balanced. Japanese individual financial asset accumulates more 1400 trillion yen (12 trillion dollar).There is unique investment structure that Japanese individual deposits their money to the bank and bank buys government bond that is to say individual is buying government bond indirectly. Furthermore it is low foreign investors ratio which is around 5%.

We call it octopus tentacles as octopus eats to survive their own tentacles.Japan has unique self contained economy. I am afraid what's octopus tentacles economy is going on.