21 Jul 11
Originally posted by Metal BrainLet's see
I don't understand them either.
It makes little sense even if it is true. Why would anybody lend to Japan if rates were so low and they can lend to another country?
1) Currency risk, maybe they think the Japanese Yen will appreciate against the Dollar.
2) They may believe there is less risk of the Japanese defaulting
3) Diversification strategy. Even if someone perceives US bonds as a better investment, they may still want to diversify and buy bonds from multiple countries, including Japanese.
21 Jul 11
Originally posted by BartsIndeed, if any foreigner had invested in yen when I lived in Japan (at a time when the yen was about 240 to the pound), they could more or less have doubled their stake by now.
1) Currency risk, maybe they think the Japanese Yen will appreciate against the Dollar.