With Japanese 30-year bond yields at 1.28%, the government can borrow forever.

Whether trillions of BOJ bond buying is a sustainable way to finance deficits is another story. In any case, if markets begin to lose confidence Japan will bring its finances under control it’s appearing more likely that QE will morph into monetary financing so the ‘default’ would come via currency devaluation.

Meanwhile, USD/JPY has crept up to 99.10 — a fresh high since May 2009.