Yen stability

Yen is living in a twilight zone of being one of the most prolific currency (M1 per capita wise) and yet suffers little inflation so far. Yet, the Japanese counterpart of the Babyboomers generation is "cashing out" of their retirement savings account in a mob now.


So how it's going to work out? Japanese government will have to do at least one of the following:


1) Roll over the debt by issuing new JGBs, but who is going to buy them? Not the Japanese savers this time, as they are net sellers as mentioned above. Probably banks, pulling the old tricks of BOJ lending at cheap rate to finance Japanese banks investing at slightly higher rates in JGBs.


2) Unstimulus/budget cutting.http://www.financialpost.com/opinion/breaking-views/story.html?id=2083037

3) Raise Taxes. Always unpopular but ultimately might be necessary.

I still recall from a few years ago, some BOJ higher-ups have foreseen that the Yen will be in the 150s per USD, and I believe they knew when their citizens are going to retire in bulk and thus generating even more M1 via action 1) above.  It's all good except the USD has also been fast depreciating over the last few years. So we are likely be looking at these two, Yen vs. USD, diving deep together and thus finding "stability" with each other.

Yen stability