Krogoff and Takeshi Tashiro took another look at Japan's so-called "exorbitant privilege"—that unusual edge the country has enjoyed on its external balance sheet. Here's the thing: holding onto this advantage depends on two critical factors. First, Japan needs to keep its debt situation manageable. Second, they can't let inflation spiral out of hand. Slip on either front, and the whole privilege structure gets shaky. It's a delicate balancing act between fiscal discipline and price stability. For traders watching global macro trends, this matters—Japan's economic health ripples through currency markets and influences how capital flows globally.