The Guardian view on the global bond shock: Andy Burnham should take note | Editorial

Japan's struggle with the United States over economic policy highlights a growing dilemma for Britain, as the country grapples with the necessity and challenge of achieving economic independence, according to an editorial in The Guardian. In times of crisis, Albert Einstein's aphorism, "In the midst of every crisis lies great opportunity," seems to resonate with the current White House administration.

The global bond sell-off, triggered by an inflationary shock from the Middle East, has prompted Donald Trump to attempt to curb Japan's efforts to reduce its dependence on the international system dominated by America.

Japan, a successful exporter, has traditionally operated independently, defying the so-called "bond vigilantes" despite running substantial deficits and possessing a significant national debt. The Japanese approach was exemplified by Shinzo Abe, the longest-serving prime minister, who refined the economic model through his "Abenomics" policy.

Central banks funded public spending and maintained low interest rates, demonstrating the feasibility of such an approach. However, the recent stance of the US Treasury Secretary, Scott Bessent, has put an end to Abenomics.

Bessent has demanded that Sanae Takaichi, Japan's finance minister, reduce her $2tn spending plans and increase interest rates. While Abenomics was not financially unfeasible, it has become inconvenient to the issuer of the world's reserve currency. The editorial emphasizes that economic independence is becoming increasingly necessary for Britain, but achieving it remains a complex task.