To Robin Brooks, the former chief currency strategist at Goldman Sachs Group, Japan¡¯s massive government debt ¡ª for now at least ¡ª is likely to doom any efforts to prop up the yen.
That debt has grown to the equivalent of more than 250% of the nation¡¯s economy, more than any of its peers, according to data from the International Monetary Fund. And, he says, that¡¯s given the Bank of Japan a strong incentive to keep interest rates low to hold down the government¡¯s costs.
The upshot: Barring a change in policy, that¡¯s going to counteract any efforts to drive up the value of the yen, which is being dragged down by Japan¡¯s adherence to the sort of rock-bottom interest rates that the U.S. abandoned two years ago.
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