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Bank Of Japan - As Expected - Does Nothing; Stocks & JPY Pump-And-Dump

Tyler Durden's picture




 

Given that zero economists surveyed expected any further QQE in this May BoJ statement, the market's positive knee-jerk reaction to the "unchanged" nature is odd:

  • *BOJ RETAINS PLAN FOR 60T-70T YEN ANNUAL RISE IN MONETARY BASE (coz it's working so well)
  • *BOJ SEES DECLINE IN DEMAND AFTER SALES TAX HIKE (whocouldanode?)
  • *BOJ SAYS EASING IS HAVING INTENDED IMPACT ON ECONOMY (crushing consumer through increasingly expensive import costs?)

The excitement must be based on them saying that "exports have leveled off more or less" and the economy is "recovering moderately." One can't help but feel like this run-stop pop will be faded very quickly... as hope is pushed to July for moar QQE.

 

Bloomberg Survey - When do you expect the BoJ to expand moentary stimulus?

  • May - 0%
  • June - 6%
  • July - 38%
  • Aug - 0%
  • Sept - 3%
  • Oct 7th - 3%
  • Oct 31st - 25%
  • Jan 2015 - 3%
  • Apr 2015 or later - 3%
  • Never - 16%

The reaction...

 

Full statement:

k140521a

 

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Tue, 05/20/2014 - 22:55 | 4779883 fonzannoon
fonzannoon's picture

Can't get that nikkei below 14k. impressive.

Tue, 05/20/2014 - 22:56 | 4779888 DoChenRollingBearing
DoChenRollingBearing's picture

Manipulation?

Que cosa es, senor?

Tue, 05/20/2014 - 23:24 | 4779941 Uchtdorf
Uchtdorf's picture

Es una cosa celestial, mi amigo. Or at least that's what Lloyd says.

Tue, 05/20/2014 - 22:55 | 4779885 Theta_Burn
Theta_Burn's picture

Between the BOJ and the FED if this were real physical cash it would be 2' deep on the entire globe...

Tue, 05/20/2014 - 23:12 | 4779918 infinity8
infinity8's picture

Is that rich enough to help my tomatoes and green beans? What planet are we on now?

Tue, 05/20/2014 - 23:32 | 4779957 AdvancingTime
AdvancingTime's picture

Japan continues to slide towards an economic abyss with each passing day. The writing is on the wall. Japan is facing a wall of debt that can only be addressed by printing more money and debasing their currency. This means paying off their debt with worthless yen where possible and in many cases defaulting on promises made. Japan's public debt, which stands at around 230% of its GDP and is the highest in the industrialized world.

 The moment the Japaneses stock market fails to rise enough to offset inflation this will turn into a tsunami of  money fleeing Japan and constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . When Japan crumbles it will be felt across the world. More on this subject in the article below.

 http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html

Wed, 05/21/2014 - 01:01 | 4780131 Leveraged Algorithm
Leveraged Algorithm's picture

Japan is a disaster and it will hit the fan. Kyle Bass has it correct and we are seeing the beginning of his prediction of negative nominal interest rates in the US as money tries to find a safe home. 10 Year below 2.5% - who would have thought - wait until the derivatives in these short duration bond funds blow up as rates hit 1%.

Long guns, food, popcorn and alcohol.

Wed, 05/21/2014 - 05:45 | 4780311 negative rates
negative rates's picture

I feel your pain brother.

Wed, 05/21/2014 - 09:45 | 4780938 Da chief
Da chief's picture

All that "yen" needs to come home / get repatriated long before JPY goes anywhere but UP UP UP!

 

As with USD....these funding currencies will be "sought" as Carry unwinds and risk comes off FIRST.

 

THEN one can look at both heading directly into the toilet.

Wed, 05/21/2014 - 00:14 | 4780065 toadold
toadold's picture

The problem with crushing you middle class into peasantry is that when peasants snap they can be extremely vicious.  More than a few Daimyo  found this out the hard way.  "An there lay the lord, and there, and over there, and I think that may be a piece by the wall."

Wed, 05/21/2014 - 00:32 | 4780096 hairball48
hairball48's picture

The Yen is doomed. It's not if, but when the yen goes to zero.

And "when" may come sooner than some think imo.

Wed, 05/21/2014 - 00:49 | 4780123 Atomizer
Atomizer's picture

The African carry trade will absorb emerging market weakness.

 

 

/hahahahaahahaaaa

Wed, 05/21/2014 - 01:02 | 4780134 Leveraged Algorithm
Leveraged Algorithm's picture

Backed by your Kenyan President......

Wed, 05/21/2014 - 03:39 | 4780230 ebworthen
ebworthen's picture

The comments in parenthesis after the BOJ declarations are priceless (and not on credit).

Keep up the good work.

Wed, 05/21/2014 - 03:43 | 4780231 GooseShtepping Moron
GooseShtepping Moron's picture

Who wrote that paper, an 8th grader? It reminds me of when I used to write my book reports on my dad's typewriter. I actually kind of like the retro feel to it. If the central bank of the one of the most advanced countries in the world can turn out a policy report in a format like that, my own writing career may not be so hopeless after all.

Wed, 05/21/2014 - 04:38 | 4780258 potato
potato's picture

I'm glad they do their meetings in English. By the way, can someone tell me what are these strange "yen" notes they referenced? FRN, bitches!

Wed, 05/21/2014 - 05:29 | 4780298 jubber
jubber's picture

MASSIVE ramp in Europe from red to bright green led bya big ramp in all US futures Dow up 60 dax up 100 FTSEMIB up nearly 400 ! IBEX up 130  BTP up 100  & Nikkei back over 14k   what a total clusterfuck!

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