Bank of Japan

Tyler Durden's picture

What Savers Do Under NIRP - The "Perversely Negative" Impact Of Going Negative





Around 40% or people who would respond to negative rates said that they would hoard cash. The risk is that this negative sentiment will infect the real economy, serving to depress spending. If so, the danger is that NIRP will have an impact on economic growth that is not merely non-linear, but perversely negative.

 
Tyler Durden's picture

Japan Braces For A "Turbulent, Volatile" 10-Year Auction With First Ever Negative Yield On Deck





"We expect the10y JGB auction on the 1st to be a new issue with a 0.1% coupon, but auction yields are likely to go into negative territory. We do not expect the bank sector to buy, and demand from dealers and foreign investors is unlikely to provide sufficient support. We expect the auction to be turbulent given investors are also unlikely to short futures and the possibility of a tail. "

 
Tyler Durden's picture

The Global Run On Physical Cash Has Begun: Why It Pays To Panic First





If, and when, a run on physical cash begins, there will be roughly $1 dollar in physical to satisfy $10 dollars in savers' claims, a ratio which drops to 20 cents of "deliverable" cash if the $100 bill is taken out of circulation.

 
Tyler Durden's picture

Central Banks Shiny New Tool: Cash-Escape-Inhibitors





Negative interests rates are the shiny new thing that everyone wants to talk about. We hate to ruin a good plot line, but they're actually kind of boring; just conventional monetary policy except in negative rate space. Same old tool, different sign. No, the novel tool that has been created is what we're going to call a cash escape inhibitor.

 
Tyler Durden's picture

Kuroda's NIRP Backlash - Japanese Interbank Lending Crashes





Not only has the Yen strengthened and stocks collapsed since BoJ's Kuroda descended into NIRP lunacy but, in a dramatic shift that threatens the entire transmission mechanism of negative-rate stimulus, Japanese banks (whether fearing counterparty risk or already over-burdened) have almost entirely stopped lending to one another. Confusion reigns everywhere in Japanese markets with short-term interest-rate swap spreads surging and bond market volatility spiking to 3 year highs (dragging gold with it).

 
Tyler Durden's picture

The G-20 Meeting Was A Big Disappointment: What Happens Next





It is now all up to the ECB: "If they lowball or grudgingly meet expectations, we could face another December 4 move because market participants will see it as the equivalent of a ‘last ease in the cycle announcement’, basically ECB throwing in the towel. If they move aggressively they will catch market off guard and unwind the view that policymakers see themselves as powerless."

 
Tyler Durden's picture

Saxobank CIO Is "Shorting Everything" Into "Nasty March"





Fearful of a renewed rise in the US dollar, Saxo's chief economist Steen Jakobsen expects a "nasty March" as this will kill commodity stabilization as well as the ability of emerging markets to live up to their expectations to revitalize the global economy. Despite The Bank of Japan's clear "example of how not to do things," Jakobsen warns other central banks will follow Kuroda's cue and, as he explains below, is "shorting everything" as he sees two major canaries in the coalmine.

 
Tyler Durden's picture

Why A Hedge Fund Manager Who Made A Killing From Subprime Is Buying Bitcoin





"Bitcoin is interesting to me as a route for capital flight. I am not opining on the long-term viability of bitcoin - I do think there is something there - but I am long bitcoin specifically to capture capital flight from China."

 
Tyler Durden's picture

Demand For Big Bills Soars As Japan Stuffs Safes With 10,000-Yen Notes





“Overall, the trend of more cash at home reflects concern about the outlook for economy among households. This isn’t a good thing.”

 
Tyler Durden's picture

Albert Edwards Is In Love With This Asset That Hasn't Had A Losing Year Since 2007





"Name me a major asset that has not seen one single yoy decline since the start of 2007? Clearly not equities or commodities. What about bonds? Again clearly not corporate bonds. What about 10y government bonds? I?ll give you a clue. It?s not the US, UK or Germany, all which saw negative yoy returns, most notably in 2013."

 
Tyler Durden's picture

The WSJ's Modest Proposal: The Bank Of Japan Should Buy Oil





"We have come to the point in Japanese monetary policy—and soon perhaps in the West—where it is hard to tell sense from nonsense."

 
Phoenix Capital Research's picture

NIRP Was a Dud, Are Central Banks Out of Options?





In simple terms, unless a new large-scale QE program or direct money printing is announced, markets are unlikely to react strongly to new monetary policy from Central Banks.

 
Tyler Durden's picture

Why Guggenheim Believes The 10 Year Treasury Will Drop Below 1%





"Central banks around the world, reacting to the same recessionary fears, are likely to cause long rates to sink materially lower than where we are today. I see the 10-year Treasury note falling to 1 percent, perhaps even lower, before year-end. According to technical analysis, the current target bottom for the 10-year Treasury note is 28 basis points!"

 
Tyler Durden's picture

"There Will Be Hyperinflation" Japanese Lawmaker Warns "Kuroda Got It Wrong" With NIRP





Following The Bank of Japan's voyage into NIRP never-never-land, the market has sent a clear signal of its displeasure and now a growing number of Japanese officials (and former officials) are questioning Kuroda and Abe's Peter-Pan-ic dream that 'they' can fly. Having called for sub-zero rates more than two decades ago, Takeshi Fujimaki, the Japanese banker turned opposition lawmaker, warns "The BOJ is trapped," now that QQE efforts have flattened the yield curve, since "if the curve is steep, banks can make profits even at negative rates. It was a mistake to adopt negative rates after QQE." But it is Fujimaki's parting comment that should have most concerned, "Japan has ballooning debt and the BOJ is financing debt, that’s the problem... it will bust and there will be hyperinflation."

 
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