Japan’s ongoing march to national bankruptcy has been a recurring theme here. See:
Japan Is In That Box
Japan Takes Another Step Towards the Cliff
How a Country Goes Bankrupt, In 10 Steps
Now the death spiral has entered a new phase, with the yen/dollar exchange rate heading straight down:
To restate the “Japan collapse” thesis, soaring government debt will eventually cause the yen to crater and/or interest rates to spike. The Bank of Japan will then face an impossible choice: Support the yen with even higher interest rates and watch government interest expense rise to national bankruptcy levels. Or push interest rates down to keep a lid on debt costs and cause the yen to collapse.
As the above chart illustrates, the “cause the yen to collapse” part of the story seems to be happening. Interest rates, meanwhile, are now spiking in a mirror image of the yen’s collapse.
Decision Time
So it’s decision time for Japan’s leaders. What will they choose? And — more importantly — what happens when the global financial system realizes that it no longer matters?
Japan is a big country, so its impending crisis creates risks for the global economy. But it’s more important as a signal to the US, Europe, and China that we’re heading in exactly the same direction.
In other words, the Fed is in the same box as the Bank of Japan, and that box is shrinking with every new trillion dollars of debt.
Japan has more than 1 trillion dollars worth of US treasuries where it can use it to strengthen the YEN but of course with the permission of its owner Uncle Joe (US government) and it cannot defy the wish of its owner as basically it has lost its sovereignty ever since US army took control of the country. Now if it raises the interest rates of the YEN or its debt which is now over 250% of its GDP, it will crash the economy as most of the debt owners are Japanese banks, companies etc, no banks or companies can afford paying high interests. Well Japan is already a long gone country unless its government or new government 1st,, is willing first to acknowledge all the war crimes and mend its ties with the countries which it victimize in WW II like what Germany did, 2nd, get rid of the US army in Japan and regain its sovereignty, but all these said easier than done. I don't think they will have a Gandhi or MAO who dares to defy imperialism and gain a new freedom and independence for its country.
Sorry to belabor the point, but what is the answer to the question posed in your title? Did you calculate a specific number?