Japanese Politician Suggests Closing Financial Markets For A Week

Tyler Durden's picture

Yesterday's speculation that a bank holiday was suggested and may be imposed in Japan due to unprecedented market swings and tens of trillions in support from the BOJ has just been confirmed. From Dow Jones: "The head of Japan's Upper House on Thursday suggested closing financial markets due to turmoil over the country's disasters, Kyodo News Service reported, in a stark example of how the crises have rattled some of Japan's prominent figures. "Markets are volatile--is such a situation acceptable?" Takeo Nishioka was quoted as telling a news conference. "Closing markets would be an option."" An option which alas would do nothing to mitigate fear, and courtesy of electronic futures markets around the world which can not be stopped save a global bank holiday, which would promptly be needed to "enforce" stability, not to mention FX or bond markets. Which is why expect to see ongoing swings of 10% in the Nikkei as everything is done to prevent further routs, up to an including the injection of further tens of trillion in taxpayer capital by the BOJ.

From Dow Jones:

Nishioka said it was necessary to close the Tokyo Stock Exchange and the currency markets for a week, Kyodo said.

The TSE has remained open and functioning during the punishing days immediately after Friday's earthquake and tsunami, with the benchmark Nikkei 225 Stock Average plunging 6% Monday, 11% Tuesday, roaring back 4% Wednesday and then ending 1.4% lower Thursday after trimming an initial 4% drop.

It's difficult to imagine trying to halt global currency trading, a $4 trillion-a-day market of trades among banks that don't go through an exchange.

Nishioka is a member of the opposition Liberal Democratic Party although, as head of the Upper House, he is by custom supposed to be nonpartisan.

h/t LDT

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oh_bama's picture

The BOJ is just stupid

In this situation, it requires heroic measures. they must come up with decisive, civilization scale QE to stop the panic and fight the disaster.

At least 1 quadrillion yen guys. 10^15 if you cannot count the 0s. Otherwise who will be BTFDing anymore? sigh..

SWRichmond's picture

Because the people can be fucked, but the banks must be saved.

primefool's picture

Yes - please close the markets. You'll find life will be much better without them. really.

The Profit Prophet's picture

Closing the TSE could be "THE" precipitating economic event that all ZHers know is coming (who would have thought that the final black swan would be a nuclear plant disater???)

In any event, this could be it gang......prep time is now very short.  Helicopters are now dropping fiat and water, and neither is going to be able to drown the nuclear debt monster emerging in the pacific.  Family and friends should be informed and warned to prepare as best they can (for those of us who haven't cried wolf too many times in the past). 


T.E.I.N. everyone....and may God keep you and your families safe.

vxpatel's picture

Drop dollars not sea water to put out the fire!

The Profit Prophet's picture

US futures way up....never mind, all is well!

Thorlyx's picture

and get out of Tokio ASAP....

primefool's picture

In todays world I guess closing the so called "markets" is the equivalent of burning the holy books in 2000 BC or 2011 AD ( in some places).

Usually things are better afterwards - really.

SashaBelov's picture

What does TSE closeing mean for ES futures?

HelluvaEngineer's picture

It means they will be manipulated after hours.  Oh, nevermind, that's because it's Thursday.

Unlawful Justice's picture

Reality can be a real bitch.

Boilermaker's picture

I agree, they should shut it down.  Otherwise, they might be tempted to continue to intervene in it and lose all credibility. 

Buyemall's picture

If they do that they are propably going to miss tommorows announcement of the european stress tests methodology. Any rumors on that tyler?

overmedicatedundersexed's picture

a little OT. but is anyone else wondering why Obuma and family are leaving the continental US this weekend?? Why now with all the fires burning across the globe..why Rio?

maybe something very wicked this way commeth..

just one of those coincidences I guess.

Confused's picture

Perhaps an invite to a Rothschild vineyard for some friendly company? 

Missing_Link's picture

Simple.  Obama knows what's really going on at Fukushima, and knows that the plume we've seen so far is nothing next to the plume we'll see in the coming weeks.

Rio puts him at a safe distance, and gives him plausible deniability to say, "Hey, on account of the cloud of radiactivity hanging over the US, my family and I have decided to extend our stay in Rio  ..."

Confused's picture

How much worse for the country can closing the markets make their situation? 

Snidley Whipsnae's picture

Talk of a banking holiday will cause the run on ATMs, checking, savings accounts to spike up.

Why are they airing the laundry in public. They should either do it or not do it... Not talk it up.

Leadership? The Japanese seem to be as leaderless as the US.

Meanwhile... Hats off to the brave workers trying to get cooling water to the reactors and spent fuel facilities. No words express the bravery they are displaying.

westboundnup's picture

I remember during the 1987 crash, the head of the NYSE was concerned that if the exchange was closed he wasn't sure when (or even if) it would be opened again.  Bet on the exchange remaining open until traders start dropping on the floor.

primefool's picture

Actually , I find it surprisingly refreshing that the BOJ has not resorted to quantitative easing in a big way in blind imitation of the bearded one. Maybe they have decided to exercise that gray matter of their own? Huh?

youALREADYknow's picture

They have injected $700B of QE into a smaller economy within one week... makes Ben look like Mises by comparison.

tmosley's picture

That's about $1.7 trillion, corrected for population.  If such numbers even matter.

hugovanderbubble's picture

All is about Opex...


U cannot halt markets with a QUadruple B.hour.....


Too many interests....


ALL its about Derivative Desk Risk Books....


These markets are completly manipulated. SCAM¡

reading's picture

I am sorry, exactly what does "close the currency markets for a week mean?"  In Japan, so every currency can trade 24/7 for the week everywhere but Japan?  That sounds like a recipe for disaster -- we have things so under control we are going to shut it down for a week.  There is no way you could halt global currency trading for a week -- that would completely shut down international trade.  That makes the Japanese politician sound even more stupid than their counterparts here in the US.  Of course, with that said, the market will probably close imminently...

Confused's picture

The question is this, should they care about the currency markets, given the current situation in their country? I don't know the potential devastation (if any) from closing the markets. But to me it seems like they should be focusing on the current situation. 

taraxias's picture

They can focus their current situation all they want, it wont make a difference. They lost control. Not a damn thing they can do about with the exception of ordering more people to go to their death all in the name of honor and bravery. They are a foolish people.

Josephine29's picture

Even if they close the Tokyo Stock Exchange there are futures markets in the rest of the world which will carry on trading. Also how can they possibly expect to stop foreign exchange markets trading the Yen? I notice that a long-standing critic of the Bank of Japan's operations wonders why the Bank of Japan did not intervene last night when its exchange rate surged.

Yet oddly at a moment when intervention might have had a success the Bank of Japan was nowhere to be seen. Short-term movements caused by a natural disaster are one of the situations where foreign exchange intervention can help in my view and are a valid policy option. Indeed if I was in charge of a foreign central bank I would intervene and help too and concerted intervention is the most likely to have an effect.



Such is the messed up nature of all this that Japan will intervene at 83 but not at 77...

jkruffin's picture

I guess Benny isn't the only idiot still holding long positions in the US ponzi S&P fraud. If these ignorant governments would just let the markets correct everything would turn out better. But the more they keep trying to pump fake money into it, they are just creating more problems and a faster crash.

hugovanderbubble's picture

The most funny thing... was yesterday..with the Pomo...

First go ahead, then cancelled, then extended...what a farce¡¡¡¡

primefool's picture

maybe an evenyt of this magnitude will prompt some middle aged folks in the Japanese power structure to realize - hey " ive got ..what.. 20 .. 25.. years left before I dodder off into the nursing home? Right? So I can spend the 20-25 years in abject seritude or as a master of mah own fate. The universe wont care either way - we are al just a thin layer of chemical scum on the surface of an insignificant random rock .

AccreditedEYE's picture

This ranks right up there with the "global intervention" idea. These policy makers just don't get it... you may be able to move prices for a period of time but you can't stop true price discovery from eventually taking place.

HelluvaEngineer's picture

It's worked for 2 years in the USA.  I'd say it has been pretty damn successful.  Hell, right now everyone is sitting around waiting for a bounce so that they can go David Tepper balls to the wall 3x long again.

AccreditedEYE's picture

What's 2 years? Most market participants know the deal, even "Balls to the Wall" Tepper. For a trade, yes. For long term investment/valuation? No way.

jkruffin's picture

With all this talk, hopefully the Japanese people and others living over in Japan right now, get their money out of these banks quick. Otherwise, they will take it and claim they can't pay them. They have done it before and have no problem doing it again.

primefool's picture

When a Bernanke says stuff like money can be created a will at no cost etc .. ( as he did) - I suspect he is too autistic to realize that most "normal" people Think - "Wow - there are kids going to bed hungry for laxk of a couple of Dollars, people dying due to lack of money for proper medical care etc etc .An HE can create money in any quantity at NO Cost". Now then - if HE can create money in unlimited quantities at no cost - AND - there are kids dying due tpo a lack of money - THEN it raises the question of - who is HE working for. Huh?

Reptil's picture

Peter Schiff said they're doing exactly the opposite of what they should be doing, since they have to import a lot of things, the opposite of what they've been doing normally which is exporting products.:


squexx's picture

Interesting comments. Seems the Jap Central Bankers are lapdogs to the Evil Tribe in the USA.

vxpatel's picture

With so much Yen printing going on, why does its value against the dollar continue to rise?

gwar5's picture

Good call on that one Tyler. You said they'd do it, or strongly consider....

Kina's picture

I guess people are realising with an imminent Japanese contraction it is going to have a knock on effect for China, Asia and Europe, Australia and that the US is well and truly ferked. QEn is guaranteed long term...USD heading down the toilet. Get out now while it still buys something.

And if people are thinking Japan might start dumping USD then they might want to get to the front of the line.

prophet's picture

Permanent Closed Market Operation?

Closing the markets?  All of em? Permanently?

Dow Jones News Service above says:

"It's difficult to imagine trying ..."

Which is why the majority of people in the markets trys to earn money the old fashion way.



Coldfire's picture

...including the injection of further tens of trillion in taxpayer capital by the BOJ. Debt is not capital.

Element's picture

When I see what the IAEA has overseen and allowed on its watch, and the comments of the idiot running it, I think they are no different to the SEC.