Pressured by Masayoshi Son: Deadlock over Upcoming Tokyo Olympics and Paralympics

According to Reuters, Japanese tycoon Masayoshi Son expressed bewilderment and concern about the Tokyo Olympics and Paralympics. He noted that “Currently more than 80% of people want the Olympics to be postponed or canceled. Who and on what authority is it being forced through？” in his Twitter post in Japanese, coupled with his follow-up tweet saying that “Does the IOC (International Olympic Committee) have the power to decide that the Games would go ahead？” His tweets are believed to be responses to comments on May 21st from IOC that the Games would “absolutely” go ahead even if Tokyo was under a state of emergency due to the coronavirus. In Sons opinion, Japan “could have a lot more to lose” as a result of having the Olympics in the future.

Japan has vaccinated just 4.4% of its population, the lowest rate among developed countries worldwide. From Son‘s perspective, “if 100,000 people from 200 countries descend on vaccine-laggard Japan and the mutant variant spreads, lives could be lost, subsidies could result if a state of emergency is called, and gross domestic product could fall.” Some Japanese medical organizations call for the cancellation of the Games from a medical point of view. Let’s put the fear aside that is blanketing Japan. I think that a number of athletes will constantly withdraw from the Games to avoid being infected by the mutant virus.

If Japanese Prime Minister Yoshihide Suga is still insistent on the Tokyo Olympics and Paralympics, I think he, together with the ruling Liberal Democratic Party (LDP), may see a huge blow in the upcoming general election in October. At present, Japan has seen 922 new cases in early March, the figure rocketing to 6288 on May 14th under the climate of worsening COVID-19 nationwide, which is indicative of how severe the pandemic situation is in the country.

Although the IOC‘s insistence that “sacrifices” must be made to ensure the Games go ahead in Tokyo provided slight support to JPY, Son’s views are believed to impose huge pressure on the Japanese government regarding the cancellation. If they are canceled, it must be good news to Japanese people but may rock the financial market in Japan as the Japanese government and commercial institutes are all in debt for the preparation of the Games, which causes the market to worry about the country‘s solvency, the concern even impeding Japan’s borrowing in the future.

In my opinion, JPY is more likely to be shaken, the main reason for which is that traders think that the Bank of Japan (BOJ) is impossible to delist as the Bank of Canada (BOC) did but possible to increase quantitative easing (QE) in response to the financial or debt crisis. Over the past month or so, I always recommended them to operate crosses by buying CAD and selling JPY because this currency pair with a wide disparity in strength, consisting of the strongest CAD and the weakest JPY, can increase the odds of gaining profits. I find that CHF has been strong recently, and CHF/JPY has soared to a six-year record high point at 121.21. As such, this market can be continuously bullish in the future.

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