Opinion | Bad money decisions are coming home to roost for the US and Japan - South China Morning Post

The article's central claim is that past monetary and fiscal choices in both the United States and Japan are now producing visible consequences. In Japan, years of ultra-loose policy and heavy government borrowing have left the country navigating the delicate exit from yield-curve control and negative rates. In the US, pandemic-era stimulus and sustained deficit spending are colliding with persistent inflation and elevated debt-service costs. The author frames these as delayed costs rather than sudden shocks.

For markets, the relevance lies in the intersection of two of the world's largest sovereign debt markets. Japanese investors are major holders of US Treasuries, so any shift in Japanese yields or hedging behaviour can ripple into US bond demand and, by extension, global borrowing costs. Meanwhile, both countries face the same underlying tension: how to manage debt loads without stalling growth.

What to watch: the pace of Bank of Japan policy normalisation, US inflation and deficit trajectories, and currency moves between the yen and dollar. These variables, rather than any single data point, will shape how the story develops.