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Japanese Stocks Tumble After BoJ Bond-Buying Operation Fails For First Time Since Abenomics

Tyler Durden's picture




 

Having rotated their attention to the T-bill market in Japan (after demand for the Bank of Japan's cheap loans disappointed policymakers) in an effort to ensure enough freshly printed money was flushed into Japanese markets, the BoJ now has a major problem. For the first time since QQE began, Bloomberg reports the BoJ failed to buy all the bonds they desired. Whether this is investors unwilling to sell (preferring the safe haven than stocks or eu bonds) or that BoJ has soaked up too much of the market (that dealers now call "dead") is unclear. Japanese stocks - led by banks - are sliding as bond-demand sends 5Y yields (13bps) to 18-month lows.

 

Umm, Tokyo, we have a problem...

Bank of Japan bought 2.62t yen ($25b) of Japan’s treasury-discount bills from financial companies today, compared with the 3t yen that the BOJ offered to acquire.

 

This is the first time the central bank failed to meet its purchase target for t-bills since at least April 2013, when Governor Kuroda stepped up quantitative easing

*  *  *

Markets are not happy - Nikkei is 300 points off today's highs...

 

led by banks collapsing to 18-month lows

 

and bond yields are sliding

 

and the yield curve flattens

 

*  *  *

And remember, the Japanese bond market (the largest in the world) is now "dead" according to dealers:

The Bank of Japan’s unprecedented asset purchase program has released a creeping paralysis
that is freezing government bond trading, constricting the yen to the
tightest range on record and braking stock-market activity.

 

...

 

“All the markets have been quiet,” said Daisuke Uno, the Tokyo-based chief strategist at Sumitomo Mitsui Banking Corp. “We’ve
already seen the BOJ dominance of JGBs since last year, but recently
participants in currency and stock markets are also decreasing as those
assets have traded in narrow ranges.”

 

...

 

The flows on both the buying side and selling side continue to fall,
said Takehito Yoshino, the chief fund manager at Mizuho Trust &
Banking Co., a unit of Japan’s third-biggest financial group by market
value. “Falling volatility is a very serious problem for traders and
dealers who are unable to get capital gains.”

*  *  *

Just a good job Kuroda is so confident on hyperinflation...

And for those hoping for moar QQE - how exactly will they achieve this when they can't get a T-bill "BOJOMO" off at current levels!

 

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Fri, 10/17/2014 - 00:09 | 5345169 Cognitive Dissonance
Cognitive Dissonance's picture

Rock, meet hard place.

Fri, 10/17/2014 - 00:16 | 5345187 frankTHE COIN
frankTHE COIN's picture

How are you doing Rocky....... my Place or yours ?

Fri, 10/17/2014 - 00:44 | 5345235 Relentless101
Relentless101's picture

Pardon the thread jack. But shocked theres nothing about Biden's son riding the white pony out of the navy.

Fri, 10/17/2014 - 01:21 | 5345286 Manthong
Manthong's picture

This is good to know.

 

WSJ:

Biden's Son Hunter Discharged From Navy Reserve After Failing Cocaine Test

I like how the WSJ mentions that he is now “managing partner at an investment company”

"I deeply regret and am embarrassed that my actions led to my administrative discharge," he said. "I respect the Navy's decision. With the love and support of my family, I'm moving forward."  TO UKRAINE

Washington Post:

Hunter Biden’s new job at a Ukrainian gas company is a problem for U.S. soft power

 

I am reading up on proper guillotine construction.

 

Fri, 10/17/2014 - 01:41 | 5345307 Relentless101
Relentless101's picture

Can't wait for WH press conference. MSM will likely kill it. But if they some how mention it as a whisper when no one else is looking, it will be hilarious to see how they spin the VP's son snorting blow off of DC hookers. Any guesses? I'll go with... they have scientific evidence that cocaine reduces susceptibility to ebola. Hes actually a patriot. Songs will praise his name.

Fri, 10/17/2014 - 04:10 | 5345412 monogratis
monogratis's picture

TIME TO PRINT SOME MOAR BONDS!!!

Fri, 10/17/2014 - 06:35 | 5345526 negative rates
negative rates's picture

We are unwilling to sell, so the reaction is to LOWER rates. Are some idiots trying to be morons around here?

Fri, 10/17/2014 - 07:25 | 5345609 WTFRLY
WTFRLY's picture

Cruise ship denied port in Belize as US tries to evacuate Dallas nurse who handled Ebola sample http://wtfrly.com/2014/10/17/cruise-ship-denied-port-belize-us-tries-to-...

Fri, 10/17/2014 - 07:25 | 5345612 TheReplacement
TheReplacement's picture

Man on flight from Africa to JFK vomits and dies en route.  CDC says no Ebola.  Passengers say CDC barely looked at the guy. 

If you live in NYC, good luck to you.

Fri, 10/17/2014 - 04:51 | 5345448 dogfish
dogfish's picture

Always good to have a coke head running an investment firm,after all what could go wrong?

Fri, 10/17/2014 - 06:36 | 5345528 negative rates
negative rates's picture

The better question is, what could go right??

Fri, 10/17/2014 - 07:09 | 5345579 CASTBOUND
CASTBOUND's picture

my neighbor's ex-wife makes $77 /hour on the computer . She has been unemployed for seven months but last month her payment was $15804 just working on the computer for a few hours. go to the website... www.job-reports.com

Fri, 10/17/2014 - 07:24 | 5345607 TheReplacement
TheReplacement's picture

Easy fix (but not the one they want):  Tax Refunds for all shoppers.  This will get the flow going, albeit from the bottom up instead of from top down.

Fri, 10/17/2014 - 00:09 | 5345170 spekulatn
spekulatn's picture

That's a shame.

Fri, 10/17/2014 - 04:12 | 5345413 monogratis
monogratis's picture

Correction: That's a sham.

Fri, 10/17/2014 - 07:28 | 5345624 LULZBank
LULZBank's picture

That's actually a scam.

Fri, 10/17/2014 - 00:10 | 5345173 ebworthen
ebworthen's picture

Crash mother fucker!

Jesus H. Christ, what a ponzi, from the North Pole to the South Pole.

"Punish savers, bleed the middle class, reward the banksters and the money-changers."

A thousand or more hangings of the complicit banksters and puppet politicians REQUISITE for sanity.

Fri, 10/17/2014 - 01:57 | 5345329 Harbanger
Harbanger's picture

-1 for using quotation marks of "I have no fucking idea what".  Can you tell me what you quoted?

Fri, 10/17/2014 - 02:30 | 5345350 ebworthen
ebworthen's picture

I quoted me.

Stocks crashing based on Central Bank buying for the sake of Banksters is a good thing.  Crash, die, crash.  Go go Godzilla.

I am cheering on the death of Central Banks, of QE, of "liquidity" based on robbing the public treasury and propping corrupt financiers while punishing the working class.

Questions?

Fri, 10/17/2014 - 02:48 | 5345366 Harbanger
Harbanger's picture

"I quoted me."

:) It doesn't work that way son, you can't quote your thoughts.  I'm not knocking what you're sayin, just learn some fucking basic grammar if you want to be taken seriously.

Fri, 10/17/2014 - 07:28 | 5345415 LULZBank
LULZBank's picture

What about the rights of the illiterates?

Fri, 10/17/2014 - 04:25 | 5345426 Lore
Lore's picture

Harbanger: Go quote yourself.

Fri, 10/17/2014 - 06:00 | 5345498 new game
new game's picture

if my grammer is bad but i point a fucking gun at your head would you then take me seriously? how about a punch to the face? a swift kick in the ass, as you run to your books, fucking book worms, lawyers and cock roaches, (power of the pen, mighter than the fucking gun bull shit). talking to myself "(quotes-haha)fucking loser/poser, thinking his articulations of words makes himself superior, thinking he will charge me with assault, fuck him, just make sure i knock him out so he is fuckling clueless", oh he is already,ha....

Fri, 10/17/2014 - 06:42 | 5345517 Dungholio
Dungholio's picture

I can't take anyone seriously who posts smiley faces in their posts or in their replies to posts... :-)

Fri, 10/17/2014 - 06:40 | 5345531 negative rates
negative rates's picture

Red eyes at morning, sailor, take warning!

Fri, 10/17/2014 - 03:30 | 5345397 kchrisc
kchrisc's picture

Punish the monkeys, and let the organ grinders go.

However, I'm a monkey with a guillotine, and my guillotining preference is "grinders."

An American, not US subject.

Fri, 10/17/2014 - 07:32 | 5345640 Pig Circus
Pig Circus's picture

Yellen to give a speech today about income inequality where she is expected to announce an extention of QE.

How ironic that as the beleaguered Middle Class is finally getting some relief at the pump she's expected to announce "printing full speed ahead" because the market has dropped 1000 points. I suspect oil prices will rise as this new patch of free money finds a home and the hammering of the Middle Class will continue. These people are so full of shit.

http://finance.yahoo.com/news/markets-looking-another-lifeline-fed-095242330.html

Fri, 10/17/2014 - 00:11 | 5345175 Bobportlandor
Bobportlandor's picture

A 63-year-old man died during a flight from Nigeria to New York's JFK after vomiting profusely - but it was only a 'cursory' exam by the CDC that confirmed he did not have Ebola.

Read more: http://www.dailymail.co.uk/news/article-2796641/fresh-fears-passenger-flying-nigeria-jfk-dies-seat-vomiting-profusely-body-declared-ebola-free-just-cursory-exam-cdc.html#ixzz3GN7GwZQ6
Fri, 10/17/2014 - 00:10 | 5345178 butchee
butchee's picture

What's the problem?  Use those spare Yen to buy the fucking Nikkei.

Fri, 10/17/2014 - 00:27 | 5345201 Spungo
Spungo's picture

I don't get it. Who is buying Japanese debt? Are they fucking retarded? Didn't Japan have something crazy like 5% inflation but less than 1% yield on bonds, meaning you're actually paying the government while taking on all of the counterparty risk associated with lending money?

Stupid people be stupid.

Fri, 10/17/2014 - 00:48 | 5345245 anachronism
anachronism's picture

The Chinese (and the Koreans more so) are desperate to keep the Japanese Yen high. Using purchasing power parity, the Yen should be priced around 125 Yen to 1 US Dollar. In the short term the pain to the Japanese consumer, who has gotten used to buying Korean and Chinese substitutes for much of what used to be made in Japan, will be great. But in the longer term it would restore the Japanese economy to its historical balance. But then the pain would be transferred to Korea and China.

So, Abenomics can work only if wages and total employment rise fast enough to offset inflation, and if Japanese corporations can bring enough production back to Japan fast enough for this to happen. But, like their American counterparts, Japanese corporations have off-shored much of their capacity to China. And like America, Japan has lost some of the skills that once gave them a qualitative advantage over the rest of the world in many vital industries.

The Chinese and Koreans are not going to let this happen. So, the pain in Japan is great with no end in sight. However, Chinese assertions, that the Ryukyus and Senkakus are historically Chinese territory, has given Abe the wedge he needs to convince a majority of his people that the pain will be worth it.

Fri, 10/17/2014 - 04:37 | 5345434 Lore
Lore's picture

This is very convincing on paper, but the Japanese economy is TOAST just like the American economy and every other pure fiat economy is TOAST.  When the only customer at a lemonade stand is the operator of the lemonade stand AND HE CAN'T KEEP UP, you know the system is profoundly, completely FUCKED even without Fukushima radiation cooking its way up the food chain.  JAPAN IS DONE.  The best they can hope for is some kind of surrogate relationship with their solvent neighbors, and to do that they had better STFU about sea lanes and oil and gas deposits under a handful of islands, because they will be lucky to get any share at all once production gets underway, which really needs to happen post-haste.  It's time to set aside the "SAVING FACE" bullshit and grapple with some very harsh long term realities.  THE BUS HAS A NEW DRIVER, AND IT AIN'T YOU.  AT LEAST DO WHAT YOU CAN TO AVOID GETTING KICKED OFF THE BUS.

Fri, 10/17/2014 - 04:41 | 5345442 LULZBank
LULZBank's picture

 

When the only customer at a lemonade stand is the operator of the lemonade stand AND HE CAN'T KEEP UP, you know the system is profoundly, completely FUCKED

 

Let me guess you never went to Business School or studied economics?

Fri, 10/17/2014 - 04:52 | 5345447 Lore
Lore's picture

Rather than initiating a pissing contest, I hope you'll demonstrate your superior intellect by explaining in simple idiot-proof terms why you still think Abenomics are 'helping.'  

Fri, 10/17/2014 - 04:56 | 5345454 LULZBank
LULZBank's picture

Chill out dude.

The joke wa on the business graduates and the economists, highlighting how well you can explain the situation using an example of a lemonade vendor.

Im on your side bro.

Fri, 10/17/2014 - 15:19 | 5348297 Lore
Lore's picture

Thanks - It was late  LOL

Sat, 10/18/2014 - 02:03 | 5349822 telke
telke's picture

I still don't get it. Sure the Chinese can buy the bonds to prop up the Yen but don't the Chinese then worry that eventually the Yen falls and they are left holding Yen that are now worth 1/2?

I too do not understand who buys bonds of a county's failing currency except the central bank of the country trying to keep it from failing in a failed last ditch effort.

Fri, 10/17/2014 - 00:28 | 5345202 anachronism
anachronism's picture

So, all the gains in the Nikkei since Japan began its QE are now gone. Should the same happen to the USA, the S&P500 would drop to about 1500. That would be about a 25% drop from its recent high, and a very respectable "Bear" market.

Fri, 10/17/2014 - 02:46 | 5345362 Wait What
Wait What's picture

stop fooling yourself, more like 1200 on SPX

Fri, 10/17/2014 - 00:28 | 5345206 Spitzer
Spitzer's picture

Putin should just go for broke and dump all of his dollars to stregthen the Ruble and just see what happens.

Fri, 10/17/2014 - 01:00 | 5345260 techstrategy
techstrategy's picture

He'd be much better off buying front month gold futures and demanding delivery.   Would change everything...  Global gold default and real assets go exponential. 

Fri, 10/17/2014 - 02:16 | 5345343 Bunga Bunga
Bunga Bunga's picture

No, Putin will pick it up and load it with its own hands into his submarine parked in the Hudson river.

Fri, 10/17/2014 - 02:03 | 5345336 Harbanger
Harbanger's picture

Can someone here who is smarter than me compare Russias GDP to Japans GDP?

Fri, 10/17/2014 - 04:20 | 5345420 LULZBank
LULZBank's picture

With or without services provided by Geishas, seasonally adjusted for Seppukus?

Fri, 10/17/2014 - 06:39 | 5345530 NoDebt
NoDebt's picture

I should start charging money for this kind of stuff, but here's everything you are likely to want to know:

http://ieconomics.com/gdp-russia-japan

Russia's GDP is about 1/3 the size of Japan.

Fri, 10/17/2014 - 06:41 | 5345532 negative rates
negative rates's picture

People can tell you anything, and usually do.

Fri, 10/17/2014 - 00:58 | 5345255 Spungo
Spungo's picture

ps "white pony" is the name of my dick

Fri, 10/17/2014 - 02:11 | 5345341 Harbanger
Harbanger's picture

Is that the pet name your girl gave it?  I would keep that info to myself.

Fri, 10/17/2014 - 02:42 | 5345360 Relentless101
Relentless101's picture

I have to second. "Pony" actually is kind of fucked up. No "white stallion"? She's calling you small bro.

Fri, 10/17/2014 - 02:47 | 5345364 Wait What
Wait What's picture

suckers

Fri, 10/17/2014 - 02:50 | 5345368 WTFUD
WTFUD's picture

More often than not , whenever, i pass by a Mc Vomits or a Bugger Kings or a KF Seizures , i come over with Ebola like symptoms. Moreover those 'Fruity Bat Bars' sold in that small village in Guinea are far more appealing than the toxic gmo's on sale in the aforementioned establishments.

It used to be that ' Saving Face ' was No.1 on the Must Do list for Japanese Elites but with Abe & The Laughable Gnomes sweeping ALL THE TOXIC SHIT under the carpet , mimicking the Western Elites , saving face has now moved to No.23 with lie ,steal and suck bankster dick filling the new top 3 positions.

Last but not least Hunter best be careful that one of those whitish lines is not polonium on his next visit to the New Republika of Ukrania. Mind you his Dadda Joe Blow is system immune to any chemical as he is just One Crazeeeeeee MotherFucka.

Fri, 10/17/2014 - 03:21 | 5345388 kchrisc
kchrisc's picture

I told this before, but one more time.

The way I kicked a Dr. Pepper habit and any desire to visit a McD's, BK, etc. was from their ever increasing shitty service and "food" quality.

No ice. Flat soda. Cold fries. Incomplete orders. Rudeness. Improperly made burgers. Dirty tables. Warm coffee. Long lines. Way too much ice. Smaller portions for same price. Napkin dispensers always empty. Filthy bathrooms. Unable to take an order...

Adios. Started using the local-guy joints for burgers and fries; burger and fries that taste like burger and fries.

An American, not US subject.

 

Note: My wife came home one day with the kids after stopping at McD's on the way home. I took a few of the McD fries and set them on a small covered plate. Went out and got some local-guy fries and also put a few out on a small covered plate. The next morning I asked here to eat a couple of fries from each plate. Had her eat a few of each after reheating them in the microwave.

She doesn't stop at McD's anymore for anything. She never let me try it with a fish sandwich, which I was looking forward to.

 

Fri, 10/17/2014 - 03:07 | 5345376 kchrisc
kchrisc's picture

Black swan alert.

An American, not US subject.

 

"Caution: Objects Are Falling Faster Then They Appear."

Fri, 10/17/2014 - 04:23 | 5345424 LULZBank
LULZBank's picture

Waiting for Black Swans, we are getting Seagulls shitting all over us.

Fri, 10/17/2014 - 04:25 | 5345425 jubber
jubber's picture

have you Guys seen the market this morning ??   to the moon baby

Fri, 10/17/2014 - 05:09 | 5345470 DirkDiggler11
DirkDiggler11's picture

Yep, the Fed to the rescue once again. They are so afraid of the whole damn system crashing down that they won't even let the markets even get to a simple 10% correction. The fact they can't even allow a correction should be a key sign of how serious things really are and how close we are to the wheels coming off of the whole BS financial markets.

Long Food, Lead, Gold and a silver.......

Fri, 10/17/2014 - 05:17 | 5345473 LULZBank
LULZBank's picture

 

 

Humpty Dumpty sat on a wall,

Humpty Dumpty had a great fall.

All the king's horses and all the king's men

Couldn't put Humpty together again

Fri, 10/17/2014 - 06:50 | 5345546 overmedicatedun...
overmedicatedundersexed's picture

From NY TIMES< the AIG case vs FED..ZH needs this like ebola needs Obumuluma.:

 

"Mr. Geithner in his testimony also played down the importance of the Doomsday Book, saying that he had consulted it infrequently during the crisis because the Fed was quickly forced to take measures beyond anything it had done before.

“We were operating really outside the boundaries of established precedent,” he said."

damn it Tylers wake up.

Fri, 10/17/2014 - 06:57 | 5345557 XAU XAG
XAU XAG's picture

"Mr. Geithner in his testimony

 

Fed was quickly forced to take measures beyond anything it had done before.

“We were operating really outside the boundaries of established precedent,” he said.

 

LOL

Translation

 

They did not know what they were doing and still don't now!

Fri, 10/17/2014 - 07:25 | 5345614 LULZBank
LULZBank's picture

 

 

FED's Doomsday Book only states 1 line:

 

"When the time comes, cause a worldwide panic and GET THE FUCK OUT OF THE DODGE!"

Fri, 10/17/2014 - 08:45 | 5345875 yogibear
yogibear's picture

IMF SDRs to replace the US dollar as current debts cannot be paid back.

It's why Bernanke and his son are borrowing hundreds of thousands because they know it will be paid back in worthless dollars.

Fri, 10/17/2014 - 06:54 | 5345547 XAU XAG
XAU XAG's picture

Humpty Dumpty sat on a wall,

Humpty Dumpty had a great fall.

All the FED's FERN's and all the FED's men

Couldn't put Humpty together again

 

Fixed it

Fri, 10/17/2014 - 08:43 | 5345871 yogibear
yogibear's picture

Japan implodes first, then the US some time later.

Yellen, Bullard, Williams, Dudley, Fisher and Evans, is seeing the future of the US with Japan. The grand Fed printing experiment.

Do NOT follow this link or you will be banned from the site!