Jonathan Fortun’s research and commentary on Japan’s economy, the yen, government bonds and the international effects of monetary policy.
Japan connects domestic monetary choices with financial markets far beyond its borders. My work examines how interest rates, inflation, wages and public finances interact with the yen and Japanese government bonds. The question is not only where the policy rate goes, but how a change in the monetary regime reaches investors, households and international markets.
Government bond yields offer one way into that question. Central bank purchases, demand from domestic institutions and participation by foreign investors shape the market together. Reading those changes alongside fiscal constraints and inflation helps distinguish shifts in bond pricing from broader pressures on the economy.
The yen provides another connection to the global system. Currency valuation, intervention and investment income link Japan’s domestic economy to international capital allocation. The research and commentary collected here examine those mechanisms through published IIF analysis and public conversations, with the date and context of each assessment preserved.
22 results
Market stress in 2022 challenged the idea that advanced economies had unlimited fiscal room. Robin Brooks, Jonathan Fortun and Jonathan Pingle connect UK bond turmoil, yen depreciation under Japan’s yield cap and Italy’s reliance on the ECB to constraints on government financing. Their November 2022 assessment argues that low interest rates should not be mistaken for unlimited capacity to borrow.
Read the workHeavy speculative positions against the yen created the risk of a sharp reversal in July 2022. The assessment argues that rising recession fears could reduce expected monetary tightening abroad and shift interest rate differentials in Japan’s favor. Markets had yet to price that change, leaving the currency vulnerable to disorderly appreciation if recession concerns intensified.
Read the workGlobal recession risks could reverse the yen’s weakness in the July 2022 assessment. Rising overseas yields had widened interest rate differentials while Bank of Japan yield curve control held domestic yields down. Falling global rates would reverse that pressure, supporting yen appreciation. This was a forecast based on the policy configuration at the time.
Read the workHigh public debt and very low bond yields coexisted in Japan under sustained central bank support. The December 2021 comparison asks whether the euro area was moving toward a similar configuration, as the European Central Bank’s role expanded and foreign government bond holdings declined. It presents an emerging parallel between the two monetary systems, rather than a completed convergence.
Read the workYield curve control helped the Bank of Japan contain yen appreciation in 2016 by shifting attention away from fears of government bond scarcity. By September 2020, however, the framework constrained policy while other central banks eased aggressively. With larger fiscal deficits easing scarcity concerns, the analysis argued for returning to quantitative and qualitative easing. This is the policy recommendation made at that time.
Read the workJonathan Fortun and Junichi Fujimori discuss data policy, cloud services, machine learning, digital identity and digital currencies in the IIF's first Japanese-language FRT episode.
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