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’From the BoJ with love
From the Bank of Japan on Tuesday, February 14:
At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided to amend the “Principal Terms and Conditions for the Asset Purchase Program”
Against “Japan-ification”
Given that it’s the question of the hour…
The US economy, says Nomura’s Paul Sheard, is not looking anything like Japan in the early- to mid-1990s.
Well, maybe just a bit. But not really anywhere near similar enough to be staring down the barrel of a “lost decade”,
Further further reading
For the commute home, where budget decisions are made for rather than by children,
- Corn goes pop! Reaches a 33-month high.
- “Expendability”: what the Saudi king has learned from Libya.
- Greg Ip on Paul Ryan’s budget proposal.
Five reasons the yen will strengthen
Since March 11, analysts in Tokyo have widely predicted that the Japan’s triple disasters – earthquake, tsunami and nuclear plant crisis – would heighten risk averseness among Japanese investors.
Indeed,
The hidden slide of Japanese business sentiment
The Bank of Japan’s quarterly Tankan business survey is seen as a vital guide to corporate Japan’s expectations and more importantly, a key indicator of spending and investment plans.
It is also, as MoneySupply once noted,
It’s not the BoJ that’s been buying the EWJ
Here’s a quick supplement to FT Alphaville’s post on Friday about post-earthquake flows into the iShares MSCI Japan fund.
Citigroup confirmed in a note on Friday that the flight from disaster took place everywhere but the disaster site:
Japan’s Wednesday bounce: what it says and where it goes
Japan has defied investor logic even more than usual in the past few days.
Even as the sense of crisis deepened around Japan’s stricken Fukushima nuclear plant, with reports of a fresh fire and radioactive leaks,
Bank of Japan to the rescue with ‘thoroughly considered’ action
As suggested on Friday, the Bank of Japan is getting ready for some “thoroughly considered” action in the wake of Friday’s devastating 8.9-magnitude earthquake and tsunami in Japan’s northeast.
On the weekend,
Mr Yosano’s ‘dreadful dream’
Have we been here before?
Not to be outdone by Japan’s (now former) top government spokesman Yoshito Sengoku, who said earlier this month that the country’s finances were about to fall off a cliff, Kaoru Yosano,
The return of Godzilla QE – this time it’s unneighbourly
Willem Buiter is back — with more criticism of Japan’s monetary policies.
They are, Citi’s chief economist writes on Friday in an 88-page note, simply too small to fight off that decade-long deflation.
‘Price-keeping’ at the BoJ
Last week the Bank of Japan announced it would undertake further asset purchases — including the unusual move of buying-up Y500bn worth of ETFs and JReits.
One small problem though — the maths.
Goldman Sachs Japan economist Chiwoong Lee has crunched the numbers behind the BoJ’s latest bank note rule-busting announcement.
Japan piles into resources, but is it an inflation hedge?
More details of Japan’s most recent stimulus measures have come out in the last 24 hours, and one of them in particular has got goldbugs and inflationistas’ tongues a wagging.
And that would be the move to create a sovereign wealth fund more focused on resource-related investments than previously imagined.
More yennery: What next?
In the tsunami of commentary triggered by Tokyo’s move on Wednesday to intervene in currency markets to curb the yen’s rise, some views of its implications strike us as more cogent than others.
For example,
Inflation and the BoJ
The narrative that emerged on Wednesday about the Bank of Japan’s intervention is that it was done for two reasons: devaluing the yen against the dollar to boost Japan’s export industries, and — because the bank wasn’t sterilising the yen sales — to give the economy an added inflationary bump.
What next for the yen: ‘A lot of fake movements’
Here’s the latest on Tokyo’s long promised (or should that be, threatened) intervention in the FX markets, as of about 6pm Tokyo time (10am BST).
The Bank of Japan is said to have sold a total of about $11-$12bn worth of yen into the market on Wednesday to buy dollars,
Adventures in FX intervention
Now, even by Japanese central banking standards, this… is weird.
Via Citigroup’s FX wire on Wednesday:
Apparently, the BoJ has been carrying out what a colleague calls “mock dry runs/drills in intervention”
A central banker’s parable: the boy who cried ‘tekisetsu’
Here’s some suggested bedtime reading for Japanese officials, who might be wondering why the more vociferously they threaten action to curb the yen’s growing strength, the more underwhelming are the results.
BoJ, the yen, and much hype for little impact
So much for all the grand expectations that this time – just maybe this time – the Japanese meant it when they talked of “appropriate action”.
We’re really not sure “appropriate” is the – er, appropriate word.
Yen intervention 101: why it won’t work
Those yen-intervention rumours are flying, fuelled by reports of discreet phone calls between the Japanese PM’s office and the Bank of Japan, not-so-discreet complaints from captains of Japanese industry and dire warnings from economists.
How to say ‘appropriate action’ in Japanese
It seems, well, “appropriate” that to top off a (relatively) wild week for markets and central banks, the prospect of yen intervention dominated trading on Friday, following media reports that Japan’s prime minister and central bank head are set to meet next week to discuss ways of dealing with the currency’s strength.
A balance sheet comparison
We’ve become used to seeing charts of the Fed’s expanded balance sheet over the course of the crisis, but here’s a useful comparison of the balance sheets of all four of the world’s major central banks,
More about the yen…
For those who might have missed a neat and incisive rundown on the yen’s robust trajectory of recent months in Saturday’s FT, we give you a short summary:
Despite rapidly deteriorating Japanese economic data,
On return-free risk and the bond bubble
Why buy Treasuries? They are, to borrow Jim Grant’s phrase — “return-free risk” — not exactly an attractive asset class.
Talk of a bond bubble to boot, abounds. Should we be anticipating the pricking of that bubble?
At its heart the argument comes down to a simple macro outlook:
BoJ kabuki: One man forward, one man back
The political deadlock that has left the Bank of Japan without a governor was broken – although not fully resolved – on Wednesday after Japan’s upper house approved Masaaki Shirakawa, deputy governor and acting BoJ head,
More BoJ kabuki: ‘Moshi moshi, is anybody there?’
Many unbelievable things have happened recently in the world of finance and monetary policy. But high up in the “you-couldn’t-make-this-up” category is the comic kabuki at the Bank of Japan, where it now looks as though nobody will occupy the governor’s office from Thursday.
Comic BoJ kabuki in Japan is not so funny right now
If the rest of the world wasn’t so preoccupied with financial market meltdowns and currency upheavals, it might take the time to muse – even briefly – about the great irony behind the tragi-comic events engulfing the usually decorous Bank of Japan.