Bank of Japan

Tyler Durden's picture

China Stocks Drop Most Since Late August, BOJ Disappoints Bailout Addicts; US Futures Flat





Almost two weeks after we explained why any hope for a QQE boost by the BOJ is a myth, and that any increase in monetization will simply lead to a faster tapering and ultimately halt of Kuroda's bond purchases the market finally grasped this, when overnight the BOJ not only did not easy further as some - certainly the USDJPY - had expected, but kept its QE at the JPY80 trillion level and failed to offer any hints of further easing that many had hoped for, pushing the Nikkei down from up almost 400 point intraday to virtually unchanged and sending the USDJPY back under 120. JGBs also traded lower on concerns there may not be much more QE to frontrun.

 
Tyler Durden's picture

USDJPY, Nikkei 225 Tumbles After Disappointing "No Change" From Bank Of Japan





We noted earlier the premature exuberation in USDJPY and Nikkei 225 - despite most of the sell-side not expecting anything from The BoJ - and it appears the banks were right and the FOMO traders wrong. The Bank of Japan made no change to its monetary policy (no increased buying, no shift in ETF allocations, and no NIRP for now). BoJ members spewed forth their usual mix of "everything is awesome" and "any quarter now" for the recovery but the market wasn't buying it. That leaves only one thing left to cling to for a "we must buy" crowd - no change today 'guarantees' moar QQE in October.

 
Tyler Durden's picture

Futures Fade Early Euphoria After Chinese Stocks Resume Slide





While any moves in the US stock market ahead of Thursday are largely irrelevant, as only Yellen's statement in 4 days will unleash epic algo buying or short covering (yes, according to JPM the Fed statement is bullish no matter what), it is what happened in China that is concerning, because while we had expected Chinese stocks to go nowhere in particular now that index future trading volumes have plunged by 99% or perhaps rise on hopes of even more easing after the latest terrible economic data, the Shanghai Composite dropped 2.7%, but it was the retail darling Shenzhen Composite which tumbled 6.7% - its worst selloff since August 25, while China's Nasdaq, the ChiNext crashed -7.5%.

 
Tyler Durden's picture

US Futures Jump Unaware Gartman Short Has Been Stopped Out, China Hugs Flatline





For now, US equity futures are higher on the day, rising by 9 point after being 14 points higher ealier, driven mostly by USDJPY correlation algos, and perhaps by Goldman's conviction that the Fed will not hike in September and may delay hiking until 2016 altogether. However, we expect this initial euphoria higher to fade momentarily, once the vacuum tubes realize that the catalyst of Friday's surge higher, namely Gartman's latest flipflopping is no longer on the table: as of tonight, just 1 trading day after his latest reco, Gartman has been stopped out as his 1.5% limit was hit when futures rose above 1962 this evening.

 
Tyler Durden's picture

The 20-Year Stock Bubble - Its Origin In Wholesale Money





Faith in the QE world is waning everywhere and with very good reason. If the "wholesale money" eurodollar takeover was instead responsible for the serial asset bubbles of the past two decades, then it would make far more sense to extrapolate stock trends from that starting point rather than the irrelevant and overstated federal funds monkeying. In this context, the panic in 2008 makes perfect sense as it was a total failure of the eurodollar/wholesale system which not only reversed in total the prior bubble levels it crushed the global economy with it.

 
Tyler Durden's picture

Bank Of Japan Buying Power Runs Dry: "If They Don't Increase Now, It's Going To Be A Shock!"





Having stepped in a stunning 76% of days to ensure the market closed green, it appears, as Bloomberg reports, time (or money) is running out for Kuroda and the BoJ having spent 78 percent of its allotment as of Sept. 7. "They've only got a little bit left in their quota," notes one trader, "The BOJ had a big role in supporting the market," he implored, "if they don’t increase purchases now, it’s going to be a shock."

 
Tyler Durden's picture

Cultish Fervor - Japan Is In QE10 And Is Going Nowhere





Since the “impossible” global panic in 2008, there have been 10 QE’s in Japan but using the numerical standard which has been applied to the Federal Reserve there may have been as many as 22 or more. What none of those have amounted to is an actual and sustainable economic advance; NONE, no matter how you count them. In very simple fact, the idea that central banks “need” to keep doing them in continuous fashion is quite convincing that at the very least they don’t mean what central bankers think they mean, and perhaps worse that the more they are done and to greater extents the more harm that eventually befalls.

 
Tyler Durden's picture

Krugman Joins Goldman, Summers, World Bank, IMF, & China: Demands No Fed Rate Hike





The growing roar of 'the establishment' crying for help from The Fed should make investors nervous. While your friendly local asset-getherer and TV-talking-head will proclaim how a rate-hike is so positive for the economy and stocks, we wonder why it is that The IMF, The World Bank, Larry Summers (twice), Goldman Sachs, China (twice), and now no lessor nobel-winner than Paul Krugman has demanded that The Fed not hike rates for fear of  - generally speaking - "panic and turmoil," however, as Krugman notes, “I think it would be a terrible mistake to move. But I’m not confident that they won’t make a mistake."

 
Tyler Durden's picture

Suddenly The Bank Of Japan Has An Unexpected Problem On Its Hands





By monetizing more than the entire Japanese budget deficit, the BOJ is running of out willing sellers. Without those, Japan's QE, just like that of the ECB, will grind to a halt. Better yet, this creates a vicious loop, because with every passing month, the inevitable D-Day when the BOJ has no more TSYs on the offer gets closer, which in turn will force those who bought stocks to sell in anticipation of the end of QE, and to seek the safety of bonds themsleves, in effect precipitating the next inevitable Japanese stock market crash.

 
Tyler Durden's picture

Second Largest US Pension Fund To Sell 12% Of Stocks Holdings In Advance Of "Another Downturn"





While many continue to debate if what with every passing day increasingly looks like a global recession, one from which the US will not decouple no matter how many "virtual portfolio" asset managers claim the contrary, there are those who without much fanfare are already taking proactive steps to avoid the kind of fallout that the markets have hinted in the past month of trading, is inevitable. Some such as Calstrs: the nation's second largest pension fund with $191 billion in assets (smaller only than Calpers), which as the WSJ reports is "considering a significant shift away from some stocks and bonds amid turbulent markets world-wide."  According to the WSJ, it will move as much as $20 billion, or 12% of the fund’s stock  portfolio, into other assets, including Treasurys.

 
Tyler Durden's picture

What The Yen Might Reveal





Iif there is one currency in the world that “deserves”, so to speak, ultimate execution it is that of the Japanese. The Bank of Japan has done more than any other central bank for far longer to kill it, but like any horror movie villain it seems immune to any reckoning or even the laws of financial sense. In the bigger picture, that is as much a damning indictment as a tale of orthodox resilience. It shows that monetary redistribution is nothing but a trap, an incredibly narrow and locked economic existence that can and will be permitted by any sustained apathy.

 
Tyler Durden's picture

Yuan Strengthens Most Since March, China Unveils New Bailout Source After Rescue Fund Runs Out Of Fire-Power





Update: China readies new bailout mechanism - pooling CNY2 Trillion of Pension funds for "investment"

A busy night in AsiaPac before China even opens. Vietnam had a failed bond auction, Japanese data was mixed (retail sales good, household spending bad, CPI just right), Moody's downgrades China growth (surprise!), China re-blames US for global market rout, and then the big one hits - China's bailout fund needs more money (applies for more loans from banks) - in other words - The PBOC just got a margin call. China margin debt balance fell for 8th straight day (although the short-selling balance picked up to 1-week highs). China unveiled some economic reforms - lifting tax exemption and foreign real estate investment rules. PBOC fixesds the Yuan 0.15% stronger - most since March, but even with last night's epic intervention, SHCOMP looks set for its worst week since Lehman.

 
Phoenix Capital Research's picture

China's is the First Central Bank to Lose Control… It Won't Be the Last





This will not be a one-off event. With the Fed and other Central banks now leveraged well above 50-to-1, even those entities that were backstopping an insolvent financial system are themselves insolvent.

 
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