Question: How much US treasury holdings does Japan have?
Answer: Roughly $1.15 trillion.
Question: How has this portfolio performed, in yen terms, since the late September low?
Answer: +19.6%. The bond price is very marginally changed in that time (10-years have gone down from 1.334 to 1.325 in price.)
Question: Assuming a 19% increase in the yen value of these holdings, how much… is that really?
Answer: 17.48 trillion yen. Over 4 months. Or what seems like $188 billion at today’s prices. ($225 billion if you start from the beginning of the move.)
Let’s put this number in perspective: Japanese 2012 GDP was at $5.8672 trillion. Let’s use the $225b number since it’s closer to the annual average. That’s 3.84% of GDP. A little sensitivity analysis and common sense then shows that the balance sheet of whoever in Japan holds this debt increases by 1.15 trillion yen for every one yen increase in the value of the US dollar.
Question: Who holds this debt, and how do I buy into them?