Analysis: Japan's Debt Trap Could Push Gold Higher Regardless of BoJ Path

Treasury Secretary Scott Bessent wants Japan to hike rates to fight inflation, but the source argues Japan can't. The BoJ's policy rate stands at 1%, while CPI inflation is 1.9% — a figure the source says is being suppressed by government energy subsidies, versus inflation that averaged 3.2% in 2025.
To seriously fight 2025-level inflation with positive real rates, the source argues the BoJ would need to push rates above 3.2%, likely to 4% or higher. With Japan's debt still around 200% of GDP, refinancing at 4-5% would push interest expenses alone toward 8-10% of GDP, which the source says Japan can't afford.
The source concludes Japan is trapped between two scenarios: either the U.S. prints money to help Japan, or Japan sells U.S. Treasuries. Either way, the source argues gold will outperform.