Still hungry for yield

Japanese investors

Japanese investors were some of the biggest players in international capital markets in the 1980s. It was the influx of Japanese capital accumulated from the vast trade surpluses of that decade that financed correspondingly huge US budget deficits. But then Japanese investors learnt the hard way that US Treasuries could deliver painful shocks.

Unfortunately, they have been learning another elementary investment lesson the hard way in recent months: too much reliance on the rating agencies ca