Opinion | Bad money decisions are coming home to roost for the US and Japan - South China Morning Post

The South China Morning Post's opinion piece argues that past monetary and fiscal choices in both the United States and Japan are now producing visible economic consequences. While the headline frames this as a reckoning, the underlying point is less about a single event than about accumulated policy legacies—years of low rates, heavy government borrowing, and unconventional central bank measures—that now constrain how flexibly each country can respond to new shocks.

For markets, the relevance lies in what this implies for the two largest sources of global liquidity. US fiscal deficits and Japanese monetary policy have long shaped bond yields, currency flows, and risk appetite worldwide. If both face harder trade-offs simultaneously, investors may reassess assumptions about interest rates, the yen, and the dollar that have underpinned many cross-border strategies.

What to watch: how the Federal Reserve and Bank of Japan communicate their limits, whether bond markets price in higher term premiums, and how currency moves transmit pressure to other economies. The piece is opinion, not a forecast, so treat its claims as a lens for framing risks rather than a prediction of specific outcomes.