Japan's recession worse than thought, data shows

Oh, Gee! A big resounding "Oh, Der!" to that! You increase taxes with no salary increases on a crippled economy and expect it to improve? Clearly, the clowns are running this circus!

Here we go......again!!!! Japan, look around you - Abenomics is NOT working!!!!!! Sad to relay this, but "You"ll be sorry...."

The reading was much worse than the median forecast of a 0.1% quarterly shrinkage in a survey by the Nikkei economic daily.

Funny, prior to the third quarter, I never heard any prediction of a contraction, the government predicted 2.4% growth, the AP and others predicted growth of around 2%. Sounds like the "Ministry of Truth" at work. Next we'll hear that "we never predicted 2.4% growth, we actually predicted a 2% decline, so things were even better than we predicted!"

@AramaTaihenNoYouDidnt

Abenomics did not include the tax hike. The DPJ proposed and passed the tax bill a few years ago -- it wasn't part of his economic plan, it wasn't even implemented by the LDP.

Abenomics would have seen solid growth numbers this year without the tax hike, which is both necessary but inconvenient (time-wise).

But Marcel Thieliant, Japan economist at Capital Economics, said the economy could return to growth in October-December.

Companies’ inventory adjustment was a large drag and overstated the weakness of the economy as some monthly data was encouraging, he said.

“The upshot is that the economy likely returned to growth this quarter,” he said in a note.

Of course a sales tax increase will put a dent in spending and if you think those in charge didn't know that you are out to lunch. This last quarter of 2014 will be even better.

Quick get that election over and done with before the real data comes out.

The consumption tax hikes were proposed by the LDP even before the election won by Yukio Hatoyama of the DPJ. The bill was passed under the administration of PM Noda of DPJ, with support from the LDP because it was their idea and they agreed with it. The first tax increase was then enacted by PM Abe (worse now than he was last time when thankfully he quit early with the runs) and this tax increase was entirely his choice to make. He spent months supposedly deliberating and prevaricating before deciding to enact the bill and increase the tax. He didn't have to do it just because PM Noda was the PM at the time the bill was originally passed. The increase itself absolutely was implemented by Abe.

What makes things even worse is that the figures are "improved" by the enormous amount of additional stimulus spending/borrowing by the government. Debt is now estimated at around 240-260% of GDP, yet we have had no growth whatsoever since Abe took charge. Anyway, as things were that terrible in the last quarter, we may see some growth this quarter, although over the whole year we will have seen a decline as all who work here in business would expect. So Abe's latest tenure will have shown no growth in anything other than national debt in his 2 years of government, but he'll be re-elected on Sunday by a landslide because no other party has a clue what to do either and the rural electorate (mainly the elderly rural Japanese) chooses the governments.

What's needed is a temporary suspension of the sales tax for 12-18 months or at least a reduction to 3%, and a massive cut in government spending for the foreseeable future. Essentially reversing Abe's moronic policies before further damage occurs. Pensioners will see significant cuts in their benefits & monthly stipends but that is acceptable given they voted for the LDP for decades which created the current economic problems. Abenomics will go down as the single greatest economic failure of the industrial/ post-industrial age.

Again, this... Can someone clearly explain to me WHY this simple formula of, increase of VAT on EVERYTHING including services while keep wages largely unchanged could possibly work out to improve the status of the economy?

Seriously someone please explain it to me. To me it is a simple formula of 1+1= poo.

Abenomics did not include the tax hike. The DPJ proposed and passed the tax bill a few years ago -- it wasn't part of his economic plan, it wasn't even implemented by the LDP.

The consumption tax hikes were proposed by the LDP even before the election won by Yukio Hatoyama of the DPJ. The bill was passed under the administration of PM Noda of DPJ, with support from the LDP because it was their idea and they agreed with it. The first tax increase was then enacted by PM Abe (worse now than he was last time when thankfully he quit early with the runs) and this tax increase was entirely his choice to make.

Actually, the LDP wouldn't vote on the DPJ budget unless they included they passed the tax increase into law. It was much more direct pressure than just the LDP supporting the bill.

Again, this... Can someone clearly explain to me WHY this simple formula of, increase of VAT on EVERYTHING including services while keep wages largely unchanged could possibly work out to improve the status of the economy?

As other posters have already pointed out, the tax increase was not a part of Abe's economic plan but a plan put into motion by the previous government in order to help improve the long term financial position of Japan.

It had a way more negative impact than people predicted. But without Abenomics, the recession would have been a while lot worse IMO.

The next quarter will certainly put Japan'e GDP growth back in the black on an annual basis and the next tax increase is going to be delayed for more than a year.

The simplest solution is to disregard the stock market altogether and stop supporting large corporations. Create incentives for small business and new technologies to ensure the workforce to get off their butts and stop living off corporate bonus handouts.

The recession is clearly in full bloom and has far to go. Which came first, the chicken or the egg or the recession?

Only die-hard and blind supporters of Abe who make a mint of his moronic Abenomics -- or two per cent of the population -- would be surprised by this, if they even bother to acknowledge it at all. Abe's comments on Saturday about the rapidly weakening yen and how it is putting companies out of business and hurting the economy overall was, "I know the weak yen is hurting people, but would you rather have the DPJ in power with a strong yen that hurts exports?" -- he cares so much about the people, obviously. And does he mention that all of the indications that the economy improved in the final quarter of 2013 fit into his campaigning? nope -- only bragging that the very final days before the tax hike saw increased spending (but denial that it was BECAUSE the tax was about to be increased!).

The vast majority of the nation are starting to suffer from Ahonomics, in one way or another, and there's no way in hell spending will go up when companies are failing to implement wage hikes (but being given heaps of profit through Abenomics!) and when the country slides further into recession. Way to go, Abe!!

The vast majority of the nation are starting to suffer from Ahonomics, in one way or another, and there's no way in hell spending will go up when companies are failing to implement wage hikes (but being given heaps of profit through Abenomics!) and when the country slides further into recession. Way to go, Abe!!

Spending has already recovered and is going up...

At least get your facts straight.

What's needed is a temporary suspension of the sales tax for 12-18 months or at least a reduction to 3%,

I don't think that'd help. People will just save the money if they think the tax will come back in future.

No arguments about slashing spending though. In the absense of economic growth, by my reckoning they'd need to cut about 2/3rd's of spending (that excludes debt servicing costs, which is huge) just to stop the debt growth. It sounds draconian, but that's the extent of the government's spending beyond it's means. What they have been doing is insane. The government is spending 100 trillion a year, whereas tax revenues peaked out at 60 trillion back when the bubble economy was in full swing.

Again, this... Can someone clearly explain to me WHY this simple formula of, increase of VAT on EVERYTHING including services while keep wages largely unchanged could possibly work out to improve the status of the economy?

The government sets the sales tax rate, but as for wages it's up to the economy to set those for the most part. Abenomics was supposed to be good for the real economy and thus indirectly boost wages, but that part of the equation didn't work out. Apparently they thought that printing money and the government spending it would boost the real economy.

Sales tax per se is a good way to tax. The real problem is the government spends far beyond it's means.

Bureaucrats rule Japanese life to an extent unheard of in other industrialized countries. The red tape industry is supported by almost 12,000 rules and regulations.

No arguments about slashing spending though. In the absense of economic growth, by my reckoning they'd need to cut about 2/3rd's of spending (that excludes debt servicing costs, which is huge) just to stop the debt growth. It sounds draconian, but that's the extent of the government's spending beyond it's means. What they have been doing is insane. The government is spending 100 trillion a year, whereas tax revenues peaked out at 60 trillion back when the bubble economy was in full swing.

The government spending to GDP is line with many OECD nations and the largest expenditure is from MHLW which includes social security and pension. You propose to cut these and hope the elders will spend as oppose to save? Are you serious??

Excellent video here on "Japan's debt problem visualized": https://m.youtube.com/watch?v=Njp8bKpi-vg&feature=share

I won't repeat above mentioned sharp, detailed analysis, there is some wiggle room, not much but maybe enough to give the economy time to breathe, the weaker yen in the 120's will turbo charge foreign investment. I am about to invest a wedge of sterling in the direction of a small but highly dynamic unmanned aerial vehicle systems company. It's too good a opportunity to miss as the Banks in Japan seem comatose to see the potential. The Christmas/New Year period will see growth in sales but it will be difficult to maintain consumer spending growth. Abe will have to make serious third arrow reforms that raises wages to a level that increases tax revenues. The ongoing Opec/US energy price war is working in favour of expensive fuel imports. The debt is the elephant in the room, most is owned by state and banks, but some 130 + % gdp is privately owned and is venerable to spiking. Another issue is BOJ money printing, they seem addicted to moniterisation of the debt instead of lobbying Abe to deal with the size of Government.

Due to the fact that Abe has failed to deliver on most of his promises, and the economy is going down the plug hole, this election couldn't have come at a better time!

Who in their right mind would vote Abe back in right now?

I can't wait to see how depressingly large his majority is going to be.

It is only in the USA the quantitavive easening booms the economy. This because US dollar is a World reserv currency. This qe program doesnt work for Japan. Due thje political tensions Booth in Europa and Asia we can se how this continents economies are slowing down. Now it is only the US economy that is booming. Thanks to US foreign policy there is now Heavy division among the Asian and European countries. The old idea that the Asian countries could have enough strong leadership to overcome internal historical disputes seems Moore and Moore as a remote Dream. If the Asian countries could have created an internal market fo their economies there could have been enough with possibilties for their companies to have an strong internal market. For now Booth Japanies, Korean, Chinese companies are moore or less suppliers to the US economy. Americans they dont produce anything else than weapons, films and dollars. Instead of a strong Asian internal market the Japanese companies are now producing mainly for the USA. This means that the americans are creating semi Colonial bondage to Japan. This is why Japan is going down. We have the same problem in Europa. Americans are designing lot of tension with Russia wich means that EU is becoming Moore or less a supplier to the US economy. There is no future in Asia or Europa if we dont break this semi colonila bondage to the USA.

“The upshot is that the economy likely returned to growth this quarter,”

I remember hearing nearly these exact same words after the bad numbers in the second quarter, except than instead of "likely", they used the word "expected". So, if translated into "realspeak", the quote would probably mean "the next quarter is going to s* donkey **s.

Americans they dont produce anything else than weapons, films and dollars.

The next time you go to a restaurant, or store, and buy something to eat, more than likely some of what you get will be made in America. America may not produce much in the way of trinkets and toys which people may want, but don't really need, but America does produce much of what the world needs, like food, raw materials, and energy. With America's agricultural, mineral, and energy resources, they will be among the world'd largest producers for generations to come.

It is only in the USA the quantitavive easening booms the economy.

America's economy is not "booming" by any definition of the word, though compared to Japan and Europe, it is doing quite well. America's growth is not due to quantitative easing, the growth is occurring in spite of it.

If the Asian countries could have created an internal market for their economies...

If wishes were horses... If Asian countries could have created internal markets, they would have created internal markets. But they didn't, and the blame does not lie with America, Russia, or Martians.

Thanks to US foreign policy there is now Heavy division among the Asian and European countries.

Much of this effect is left over from the cold war. Perhaps it would be better had the Soviets and Chinese communists had stronger international policies than they did? The foreign policy of any country puts it's own needs first. That is the way it is, the way it has been, and the way it will always be. You might think that the current situation is bad, but don't forget that it could be far worse.

Upgrayedd

As other posters have already pointed out, the tax increase was not a part of Abe's economic plan but a plan put into motion by the previous government in order to help improve the long term financial position of Japan.

It had a way more negative impact than people predicted. But without Abenomics, the recession would have been a while lot worse IMO.

The next quarter will certainly put Japan'e GDP growth back in the black on an annual basis and the next tax increase is going to be delayed for more than a year.

Good post Upgrayedd good to see that amongst the masses on here with no clue , some one else understands.

Abe's crapnomics has been a disaster for the japanese economy but the sheeple will vote the moron in again. No hope for this country, it can't be saved.

UpgrayeddDEC. 08, 2014 - 02:42PM JST

As other posters have already pointed out, the tax increase was not a part of Abe's economic plan but a plan put into motion by the previous government in order to help improve the long term financial position of Japan.

Another poster also pointed out this:

BuBuBuDEC. 08, 2014 - 02:37PM JST

The consumption tax hikes were proposed by the LDP even before the election won by Yukio Hatoyama of the DPJ. The bill was passed under the administration of PM Noda of DPJ, with support from the LDP because it was their idea and they agreed with it. The first tax increase was then enacted by PM Abe (worse now than he was last time when thankfully he quit early with the runs) and this tax increase was entirely his choice to make. ... Actually, the LDP wouldn't vote on the DPJ budget unless they included they passed the tax increase into law. It was much more direct pressure than just the LDP supporting the bill.

You didn't seem to have anything to say about that, though.

Attempting to "spend your way to recovery" (while increasing debt which comes with its associated interest charges) and tax the middle and lower classes (people who have ever-diminishing real income) has never worked. There is not one example of a long-term sustained recovery in any country in history. To the contrary, history shows us countries and the world going to war due to the inevitable outcome of such policies. The only rational thing to do is to drastically cut wasteful government spending, the type that supports dead-wood industries and special interest groups, rein-in military spending, keep social services and benefits for families with children, Beef-up and support K-12 education, offer assistance for tertiary education expenses (without putting the student/family in lifelong debt), and put Japan's people-power to work. Oh, and yes: Abe and Aso, get out of town.

Abenomics - total FAIL!

@Berit Anderson,

Japan does have its own internal economy and thats part of the problem. They produce and buy mostly from themselves. You see any foriegn cars except the occasional BMW or Benz driving around? How about foriegn made products in the home centers and markets? Japans problem is that they are a closed nation and will continue to be so to protect their industry.

And more to come.

Great.. tax rises to pay for public debt.. But where's this debt really going? In all the sea walls, dams, tetrapods, bridges to nowhere they are building non stop and at a record pace since Taro Aso and his minion Abe took office? No doubt that is the case! They basically hijacked public funds into private enterprises, mainly in the construction sector and Aso's own conglomerate, Aso-Lafarge. Wake up Japan! Drive these looters out of office.

5petals

@Berit Anderson,

Japan does have its own internal economy and thats part of the problem. They produce and buy mostly from themselves. You see any foriegn cars except the occasional BMW or Benz driving around? How about foriegn made products in the home centers and markets? Japans problem is that they are a closed nation and will continue to be so to protect their industry.

Hmmm wrong actually, how about VW the biggest selling foreign car in japan, how about all the top end luxury cars floating around the place, how about Samsung, how about Microsoft, how about apple, , how about all the designer clothes, bags, food oil etc ? Japan imports plenty it needs to be exporting more than it is bringing in

As other posters have already pointed out, the tax increase was not a part of Abe's economic plan but a plan put into motion by the previous government in order to help improve the long term financial position of Japan.

If the plan was already in motion, shouldn't Abe have factored this into his grand 'plan'?

I will be the first to admit I know nothing about economics, but even a fool like me can see that all the attempts to boast the economy in the last few years were idiotic.

The government spending to GDP is line with many OECD nations and the largest expenditure is from MHLW which includes social security and pension. You propose to cut these and hope the elders will spend as oppose to save? Are you serious??

nigelboy -- weren't you telling us just a month or two back that Abenomics was working great guns simply because the Nikkei was rising? And myself and others pointed out the falasy of that argument. You'll have to forgive me if I don't give your comments on this subject a lot of credence.

Japan's current hard times could prove even worse than those of the 1990's. Sony and Sharp had its biggest-ever annual loss. Like many of Japanese manufacturers, companies have taken drastic steps, including massive job cuts, production suspensions and factory closings. Many companies, the layoffs include full-time workers and replace them with temp workers. Now the tidal wave from outside has landed and the untouchables have been touched. The workers are disposable. Why did Japan goverment amend laws to permit giving temporary workers less pay and fewer benefits? Ask Koizumi. The 40 percent of part time workers with no benefits is the problem. It will increase to 50 percent in half a decade. They can't even get a mortgage loan, or even get married to have one child.

"Worse than thought?"

Gee, what a surprise. Who would think a government would try to hedge bad news?

As the price of oil falls we should see lower commodity prices. However, the value of the yen is rapidly diminishing as the government manipulates it. This is being reflected in the physical gold price.Strangely, in ultra regulated Japan, where it is usual for products such as beer or rice to be sold at the same price nationwide, I was offered between ¥3500-5000 yen a gram for 24k gold.Market forces at work? Physical gold unlike the fiat yen is proving to be a store of value. In yen terms gold has risen more than 14% higher this year. Increasingly, the yen is becoming,through manipulation, a worthless currency....

nigelboy,

The government spending to GDP is line with many OECD nations

I'll take your word for it, but we need to look at Japan's specifics. The fact is that the Japanese government spends circa 100 trillion yen a year, from a tax revenue base of around 50-55 trillion yen a year, and they have accumulated 1,040 trillion yen worth of debt, which requires a large chunk of the tax revenue to service.

How many other OECD countries have a debt as large and yet still spend this much more than tax revenues?

and the largest expenditure is from MHLW which includes social security and pension. You propose to cut these and hope the elders will spend as oppose to save? Are you serious??

Firstly, this isn't about encouraging the elderly to spend, and yes, I'm serious.

Did I sound extreme? What's extreme is the fact that Japan's finances are in such bad shape that, in the absence of further tax hikes and miracle economic performance, 2/3rd's of spending would have to be slashed just in order to stop Japan's debt pile from increasing. An extremely bad problem calls for not-so-nice countermeasures. This is just the sad reality.

I don't believe that Japan's reckless spending behaviour can continue indefinitely, and if one agrees with this premise then it's important that Japan addresses the problem earlier, rather than "later" (e.g. never), because when the unsustainability of the behaviour catches up, not only the elderly but all residents of the country won't be singing Happy Days.

"What's extreme is the fact that Japan's finances are in such bad shape...."

No they aren't. Japan has proved that it can sustain and meet its fiscal obligations, regardless of the circumstance. If it couldn't, then a Greece or Argentina scenario would have played out long ago.

The debt fear-mongering is baseless, because it can't offer any evidence that Japan's fiscal debt is harming the economy.

nigelboy -- weren't you telling us just a month or two back that Abenomics was working great guns simply because the Nikkei was rising? And myself and others pointed out the falasy of that argument. You'll have to forgive me if I don't give your comments on this subject a lot of credence.

You do realize that the consumption tax increase, which was implemented in the prior cabinet, was the cause of this, right? Seriously jerseyboy, do keep up.

I'll take your word for it, but we need to look at Japan's specifics. The fact is that the Japanese government spends circa 100 trillion yen a year, from a tax revenue base of around 50-55 trillion yen a year, and they have accumulated 1,040 trillion yen worth of debt, which requires a large chunk of the tax revenue to service.

It's called a national burden rate which Japan sits at one of the lowest. To put it simply, Japan per capita, don't get taxed as much.

Did I sound extreme? What's extreme is the fact that Japan's finances are in such bad shape that, in the absence of further tax hikes and miracle economic performance, 2/3rd's of spending would have to be slashed just in order to stop Japan's debt pile from increasing. An extremely bad problem calls for not-so-nice countermeasures. This is just the sad reality.

No. Since the majority of the expenses are to the elders with their social payments and pensions who also happen to own the most of the cash savings (over 800 trillen yen for 65 and over), they need to loosen their pockets. One of which was to revise the estate tax where the exemption amount decreased and the new high tax rate was incorporated for 600 million yen and over.

As JeffLee stated, the yen simply did not dissapear as a result of Japanese government's spending. They are essentially saved by the very elders who benefited from them.

Since the majority of the expenses are to the elders with their social payments and pensions who also happen to own the most of the cash savings (over 800 trillen yen for 65 and over), they need to loosen their pockets.

My view is that people ought to be left to do what they like with their own pockets, but you're right that this sector has the majority of the money, and it therefore it's highly questionable if it needs the level of government expenditures it is receiving.

the yen simply did not dissapear as a result of Japanese government's spending. They are essentially saved by the very elders who benefited from them.

If that were an accurate protrayal of the majority of the expenses, it would beg the question - for what purpose? But the MHLW chunk of the budget is only a 3rd of expenditures, and those questionable pension disimbursements are only a sub-chunk of that. (In any case, of course the number of yen doesn't "dissapear", just as the number of Zimbabwean dollars didn't "dissapear" either - a point constantly lost on some).

One of which was to revise the estate tax where the exemption amount decreased and the new high tax rate was incorporated for 600 million yen and over.

Estate tax at 1.5 trillion yen is trivial. That this is the type of measure the government is fiddling with reminds one of the turn of phrase about rearranging deck chairs on the titantic.

Japan has fallen into deeper into deflationary depression, because Shinzo Abe's programs have failed to put money where it counts, in the real economy flowing between the household and domestic business sectors.

He cut corporation taxes which didn't reflate the real economy while he raised sales tax and hidden and deflationary Value Added tax on production and indirectly on consumption and eliminating national regulation of the national economy. Shinzo Abe obviously wants increased imigration and earlier deaths for Japan's elderly. . He has done nothing to curb pornography which is eroding basic Japanese family and social relationships, manhood and dignity. Shinzo Abe was not trying to increase standards of living, Japan's consumption, its aggregate domestic demand. Instead he was doing what Greece and the US are doing -- imposing austeirty and rasing corporate power over citizen power to attract international investment. That fails the people everywhere as a means of ending middle-class deflation depressions.

Shinzo Abe promised the international bankers at Davos that he would drill to break up the "solid rock" of Japan's traditional views of employee-employer relations, that he would end overtime and make firing of workers easier.

The Japanese people are still unified, they are still basically one people -- but just as in 1936 when corrupt big business planned to betray Japan by invading China -- the occasion of the famous 2/26 event -- we do not know if those taking the bribe were aware that they were betraying Japan, involving Japan in a war that was against its own interests -- because Stalin was the enemy and Manchukuo was the country that needed protecting from Stalin. The Japanese were tricked to take the path that led straight to the fire-bombing of Tokyo and atomic bombs on two cities. The American people and the Japanese were led by international bankers -- just as the economy of Japan is being modified to fit their agenda today.

May people everywhere take a more active interest in changing policies that have been dictated by international organized crime and fashioning monetary and finance systems that truely will benefit the great and good people of Japan.

Please excuse me for sharing such an unpleasant view. Who is ready to cope with such a reality? I write only in the hope that people will realize where corrupt servants of the 1% is taking their beloved Japan.

My view is that people ought to be left to do what they like with their own pockets, but you're right that this sector has the majority of the money, and it therefore it's highly questionable if it needs the level of government expenditures it is receiving.

You cut that and they will be more inclined to save and not spend. This is essentially the origin of the deflationary spiral.

If that were an accurate protrayal of the majority of the expenses, it would beg the question - for what purpose? But the MHLW chunk of the budget is only a 3rd of expenditures, and those questionable pension disimbursements are only a sub-chunk of that. (In any case, of course the number of yen doesn't "dissapear", just as the number of Zimbabwean dollars didn't "dissapear" either - a point constantly lost on some).

Sub chunk? It inflated to 800 trillion yen.

Estate tax at 1.5 trillion yen is trivial. That this is the type of measure the government is fiddling with reminds one of the turn of phrase about rearranging deck chairs on the titantic.

Something got to be done for the elders to spend without being punitive in nature. Like I said, the money (yen) didn't dissapear. It never went back to the economy due to this overwhelming deposit savings by the elders. The banks held them. And since the banks aren't lending (i.e. coporations not borrowing to invest due to the delfationary cycle), they had rather limited choice but to buy JGB and the cycle continues.

nigelboy,

You cut that and they will be more inclined to save and not spend.

But as you said, they have loads of cash savings. I tend to think they would still buy food and other stuff that the elderly buy, even if it means drawing down their massive 800 trillion yen of savings. (Isn't that the point of having retirement savings?)

Sub chunk? It inflated to 800 trillion yen.

I don't think it's the case that those 800 trillion yen of savings all come from government extravagance.

Something got to be done for the elders to spend without being punitive in nature.

Not giving 200,000 yen a month to elderly people with tens of millions of financial assets doesn't strike me as being punitive, and even if it was, it's necessary to reform given the system is built on a broken assumption of a growing workforce.

they had rather limited choice but to buy JGB and the cycle continues.

...until the Abe and the BOJ said it would (if we are realistic) monetize it in increasing amounts, starting the yen on a rapid descent from it's highs in 2011. But I'll grant you and JeffLee that the government hasn't defaulted, for whatever that is worth.

But as you said, they have loads of cash savings. I tend to think they would still buy food and other stuff that the elderly buy, even if it means drawing down their massive 800 trillion yen of savings. (Isn't that the point of having retirement savings?)

Sure. Just as many people stopped spending on big ticketed items after the consumption tax implementation, don't you think that they would spend even less if you cut their payments?

I don't think it's the case that those 800 trillion yen of savings all come from government extravagance.

I don't think 'all' came from them. But it certainly goes to show where the money actually ended up and where it remained stagnant.

...until the Abe and the BOJ said it would (if we are realistic) monetize it in increasing amounts, starting the yen on a rapid descent from it's highs in 2011. But I'll grant you and JeffLee that the government hasn't defaulted, for whatever that is worth.

Like I said, you are going to have to cash them back to yen to realize the gains and eventually buy something in yen if you want to take advantage of those gains. i.e. yen is back in Japan, circulating.