Japan has the highest deb/GDP ratio in the industrialized world. This high ratio is one of the reason why traders are pummeling Italian bonds and demanding higher yields. Why aren't they doing the same with the JPY debt markets?
ability to repay... and that they print money like it's nothing to devalue the Yen on purpose (edit, look at the history of the BoJ.) Italy doesn't have the same options.
+1. also JPY has a current account surplus so they don't need external financing like US/eurozone. also they place 95% of their debt domestically so they don't need everyone else to buy again like US/eurozone. repeat after me (not just for op sake): do not take a position based on fundamentals without at least looking at the chart first. so many traders (not just individual traders i'm talking re hedge funds) have blown up b/c they listed the same things the op mentioned as a reason for JGB yields to double/triple and they instead went down. if you either used a stop and/or traded w/ the trend you would've been either had a small loss w/ the stop if you shorted or made money if you went long.