Cowley: Japan - a conspiracy wrapped inside an enigma

You wonder whether internet conspiracy theorists would get a tad paranoid if you were to point out that there appears to be an elite group of transnational conspirators who control all the conspiracies, are connected to each other and have been controlling all conspiracy theories for thousands of years.

No doubt they would have a couple of sleepless nights over it. It is tempting to feel the same way about a small group of people who have been constantly calling for the imminent demise of Japan with marginal anecdotes that confirm their feverish analysis.

To them the situation must already seem like an organised global conspiracy, such is the weight of the evidence in their favour and the lack of tangible reaction to it.

All you can really say about Japan is that each day brings the inevitable one day closer.

Pressure comes and goes and the Japanese Apocalyptors emerge out of the shadows, shake their fists at the world and then retreat again, having not got what they want.

And what they want is the collapse of the Japanese yen and a rise in bond yields to (according to some) in excess of 10%.

To put that into perspective, if that were to happen to a ten-year maturity Japanese Government Bond (JGB) today, the value would go from about ¥100 to about ¥55, a 45% price decline.

If you were to combine that with a yen movement back to levels seen in the past fifteen years then on top of this you would experience a 75% fall in the relative value of the currency.

As you can see, calling the turn in the Japanese market carries with it very high stakes indeed. If you measure yourself against a market index containing Japanese assets and the yen, its probably the easiest performance you will ever see.

If you are an absolute return player, then the combination of a yen bond decline coupled with a short on the yen will be too much to resist even for a small portion of a portfolio.