Japan's silver lining.

• Position: Off the News

Tokyo financial strategists hardly failed to note that many of the sovereign wealth funds this year appear to have invested too early in U.S. and European corporate and financial assets. The thinking therefore is that because Japan's large multinational corporations already enjoy reasonably strong balance sheets and lots of cash, they could be in a relatively strong position as the current global credit crisis continues to unfold. This situation is seen as Tokyo's silver lining of the current scenario in which the yen continues to appreciate.

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The question is whether the Bank of Japan is allowed to raise interest rates and thus generate across the board more cash flow through the nation's massive private JGB holdings. The debate over interest rate policy...