STUMP » Articles » Interest Rates and Sumo, Nagoya 2022 Edition » 15 July 2022, 21:56

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Interest Rates and Sumo, Nagoya 2022 Edition  


15 July 2022, 21:56

Back in March, in the podcast section of my substack, I posted an episode called “Interest Rates and Sumo”.

July Sumo Time

Well, it’s sumo time again! Today, Friday, July 15, 2022 was the 6th day of the Nagoya Grand Sumo Tournament for 2022. Coincidentally, my new article in the International Section newsletter of the Society of Actuaries has been published, titled…. Interest Rates and Sumo.

To entice you to go over there and read it, here are the two graphs from the article:

Figure 1

10-year Government Bond Yields, U.S. vs Japan

Figure 2

May 2022 Makuuchi Wrestlers

A shout-out to Fred Pinkerton, who gave me the data and the idea to try the scatterplot (he had his own), and to Sumo Follower on Twitter, who had an update to the data for the May tournament.

It’s July tournament time, and I haven’t updated my spreadsheet yet for the actual combatants. I know Takayasu and his entire stable are out, due to COVID infections, but the other wrestlers have been in so far. Ichinojo (spoilers!) has been dominant so far, but others may come from behind to knock him from the top. It can change!

My Fave Ura

I am hopeful for my fave, the cheeky peach Ura: (he’s the one on the left, and he’s associated w/ the color pink, the color of his mawashi, the belt the wrestlers wear.)

I grabbed these from one of my fave subreddits, /r/SumoMemes. Note — it’s tournament time, so spoilers abound, if you care about such things.

The Largest Man is Winning… For Now

As mentioned above, as of today, the largest man in terms of mass is winning. That’s Ichinojo, who is often termed Snorlax by younger, more irreverent sumo fans.

From my article:

To be sure, rikishi (sumo wrestlers) such as Ichinojo are huge—tall and massive. Terunofuji is not as heavy, but he is taller than Ichinojo, and he is the current sole Yokozuna. That is the highest rank a sumo wrestler can attain.


Wakatakakage was the champion for March 2022. He is the third lightest wrestler on this graph [Figure 2 above], at 131 kg (289 lbs) though of a good height (182 cm; almost 6’). He won against Takayasu in the play-off on the final day. Takayasu is 184 kg and 187 cm. At about the same height, but over 100 pounds lighter than Takayasu, Wakatakakage used some agile footwork at the edge of the ring to win the match.

Yes, many times, the larger man will win. But the larger man often has trouble moving rapidly in the ring, and often has more injuries, especially around his knees and ankles. Some wrestlers improved in their performance after losing some weight. Sumo is applied physics, and one must work with the frame one has and the particular opponent one is against. One should not assume it will always work out one way.

So far, Ichinojo is undefeated. He may get to the end of the Nagoya tournament undefeated.

However, if you look at his record, he has never won a tournament, and has been runner-up twice. Mind you, not winning a tournament is not a mark against him, especially given he had to contend with the GOAT, Hakuho, his entire career. He has 9 gold star wins, which means he has beaten a top-ranked wrestler, a yokozuna, while he was at a relatively low-ranked level. (There is a monetary bonus that comes from such wins that persist through one’s career as a wrestler.)

So, many people are hoping Ichinojo will finally get to win a tournament. For many sumo wrestlers, winning a tournament is a once-in-a-career experience. It would be fabulous for him, and he’s really working for it. But people have been impressed with his results so far and if he doesn’t win, people won’t say that he’s a failure…. it will be something that has happened many times before and will likely happen again with other wrestlers as well.

No Natural Law to Interest Rates

And going back to the interest rate point of my article:

For many years, we had been hearing from people: “the rates must go back up!”, and I looked at the Japanese curve and wondered if they could keep going down, even into negative territory. There is no natural law that interest rates have to follow that says they must go up at some point. Similarly, while there are physical laws sumo wrestlers obviously follow, there is no natural law that says the bigger wrestler will win.

So maybe we will see those ten year rates start climbing up in a sustained way, and maybe we’ll have a 1950s–1980s cycle recapitulate. Or maybe we will be like Japan and see the rates turn back downward again.

I wrote this months ago before the recent inflation run-up…. but it still could happen this way, unfortunately. It would be nasty, but nasty things do happen, you know. We could have a rapid spike and collapse in rates. This is not Isaac Newton.

Another time, perhaps, we can have “fun” looking at what rates did from 1975-1985 in the U.S. Or perhaps I could look at non-U.S. countries when someone thought it would be a good idea to let the currency printers let fly, start doing all sorts of debt amnesties, defaulting on sovereign debt, and all sorts of crazy things…. and let’s see what exchange rates and interest rates look under such scenarios, eh?

But for now, there’s sumo.

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