Originally reported by Bloomberg is the admission by an official at the Ministry of Finance that Japan is in worse shape than Greece. More disturbing is the line about Japan being extremely vulnerable to energy price rises. I think we all know where they are going when you look at the prospect of war in Syria and Iran this year.

In a stunning turn of events, a Japanese Ministry of Finance official admits to Richard Koo’s worst nightmare “Japan is fiscally worse than Greece“. Bloomberg is reporting that, at a conference in Tokyo, Yasushi Kinoshita says Japan’s 2011 fiscal deficit was up to 10% of GDP and its debt-to-GDP has soared to over 230%. What is more concerning is the Kyle-Bass- / Hugh-Hendry-recognized concentration risk that Kinoshita admits to also – with a large amount of JGBs held domestically, the Japanese financial system is much more vulnerable to fiscal shocks (cough energy price cough) than Europe. Of course, the market is catatonic in its reaction to this – mesmerized by the possibility of buybacks and hypnotized at big-banks-passing-stress-tests – though we do note the small reverse stronger in USDJPY has reversed as this news broke and the USD pushes modestly higher.

Source: ZeroHedge

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