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Japan intends to raise $109 billion. It needs the money to try to halt the slide of its economy which, so far, has performed worse the most in Europe and North America.
The market for raising sovereign debt is getting crowded, with the US pushing Treasuries at a record rate and the UK and other large EU nations looking for more capital to save their own economies.
This need for money will test whether China and other net buyers of national paper are willing to wade further into these markets without being rewarded with substantially higher interest rates. Higher rates mean higher deficits, and higher deficits may trigger a need for more borrowing.
It is an ugly cycle for the financially needy.
Douglas A. McIntyre
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