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Yen Surges After Japan FinMin Says Speed Of Yen Collapse Has Been Too Fast

Tyler Durden's picture




 

First the Japanese central bank proceeds to monetize all new debt issuance and is on route to holding 50% of all 10 Year bond equivalents within 2 years, sending the Yen year plummeting to 7 years lows daily, and then - just like Europe - Japan gets cold feet and realizes that the next steps are USDJPY 145+, meaning a complete collapse of the Japanese economy and a full on FX, if not shooting, war in Asia. So what does Japan's finance minister Aso do? Why he talks the Yen higher, in the process completely confounding the FX algos, and risking a full blown collapse in the Nikkei just 3 weeks ahead of the Japanese snap elections.

  • ASO:  YEN WEAKENING OVER THE PAST WEEK HAS BEEN TOO RAPID: RTRS
  • JAPAN'S ASO: SPEED OF YEN WEAKENING HAS BEEN TOO FAST: BBG
  • ASO: FX RATES UP TO MARKET, NOT SOMETHING WHERE WE INTERVENE... at least he is still insane
  • YEN GAINS ACCELERATE; ASO SAYS YEN WEAKENING BEEN TOO FAST

And this is not how you win the reitrees' vote:

  • ASO: HAVE TO RECONSIDER SOCIAL WELFARE FUNDING AFTER TAX DELAY

Then again, considering Abe may really just want to get the hell out of Dodge before he is forced out (and before all the Imodium runs out again) a market crash may be just what the Prime Minister ordered...

Yen:

 

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Thu, 11/20/2014 - 22:05 | 5472071 El Oregonian
El Oregonian's picture

"Full speed ahead!" Huh? ... what iceberg?

Overheard from U.S.S Fukushima-Titanic Captain.

Thu, 11/20/2014 - 22:12 | 5472125 markmotive
markmotive's picture

Japan needs a weak yen if it is to survive.

Japan is stuck. Exports are its only way out.

http://www.planbeconomics.com/2014/11/mohamed-el-erian-japan-stuck-in-ma...

Thu, 11/20/2014 - 22:18 | 5472159 max2205
max2205's picture

Famous last words: What was that flash of light?

Thu, 11/20/2014 - 22:49 | 5472271 knukles
knukles's picture

No  That was your retina popping.

Fri, 11/21/2014 - 01:39 | 5472760 aVileRat
aVileRat's picture

Yeah, you don't need a PHD to figure out it was going to 120 'top tick'. Anything past 117 is grossly overstating the scale of easing the BOJ can do, even if the Abe3.0 government figures out a way to cut their imports in half and straight up monetizes all debt.

On another note, some food for thought on your next Uber rideshare while pouring over Nintendo or Honda's next quarter:

http://www.theage.com.au/business/world-business/limo-ride-with-nobel-la...

Paul is right, the tax hike will lead to riots in the streets. What Paul has wrong is dumping more money into the system, without increasing competition in Japan will ensure the captial will remain stuck on the impaired BoJ primary dealers, much like US banks today, which TD has wrote about for 7 years now. So Abe has effectively 2 jobs to do:

1. Throw the Zabatzu under the bus, and ban cross-holding corporate structures which cause stupid deadweight loss & tax bleed, plus that whole stupid silent majority culture which makes activisim or M&A impossible (and growth a pipe dream)

2. Bring in the toughest insider trading, fraud rules on the planet. If Japan is the uber-Honorable culture they claim to be, the Olympus, Toyoda, Airbag, Trading scandals... etc etc should be met with draconian governance and legal punishments, with a Chicago school snap change in policy to shake markets out of their current 30 year zombie drift.

3. In line with a snap-policy move, just straight up introduce a midnight bill which privatizes all public pensions plus SOE's. Cut the Japanese trading houses loose, with the same mandate as BP & the UK gilts and be Thatcher-Kun you promised to be.

4. In line with 2, kick the nuclear industry out of bed and get on with building those LNG terminals. Shift the tax hike to dead weight loss leading industries vs. personal consumption theorycrafting.

Thu, 11/20/2014 - 22:29 | 5472206 KnuckleDragger-X
KnuckleDragger-X's picture

Waiting till after you jump out of the airplane to decide you made a bad decision won't change the outcome.

Thu, 11/20/2014 - 22:38 | 5472238 Mine Is Bigger
Mine Is Bigger's picture

Too bad.  Too many people are not smart as you. They think they will be saved if they jump off the plane just before it hits the ground.

Fri, 11/21/2014 - 00:31 | 5472628 Bloppy
Bloppy's picture

Yen up = bullish. Yen down = bullish. That's how it works now.

 

WEIRD media feuds, alliances emerge over Cosby allegations

http://tinyurl.com/ph5rtzy

Thu, 11/20/2014 - 22:06 | 5472093 himaroid
himaroid's picture

You guys need not speculate on the next U.S.election. 

Getting a bit ahead of events, don't you think?

Thu, 11/20/2014 - 23:00 | 5472306 knukles
knukles's picture

Hillbillary/Pocahontas

 

Thu, 11/20/2014 - 22:06 | 5472094 Mark of Zerro
Mark of Zerro's picture

drip, drip, drip.

Goodbye, yen.

 

 

Thu, 11/20/2014 - 22:06 | 5472098 Al Huxley
Al Huxley's picture

Ah, finally taking a page from MODERN central banking and switching from DOING things to SAYING things.  Maybe he should say they're going to buy fewer bonds, or that the target rate is 105 or whatever, it would take off a lot of the pressure that comes from actually monetizing the debt, even if they continued to fully monetize the debt behind the scenes.

Thu, 11/20/2014 - 22:08 | 5472104 Amish Hacker
Amish Hacker's picture

It's a wonder to me that FX traders can stay alive in a "market" that behaves like this.

Thu, 11/20/2014 - 22:10 | 5472124 Mark of Zerro
Mark of Zerro's picture

It's wonderful. The volatility is like a breath of fresh air. 

Thu, 11/20/2014 - 22:19 | 5472165 vegas
vegas's picture

It's simply time for some profit taking from the last week's action up; his comments were timed exactly as the market started to retrace anyway so as to make it look like he had something to do with it. These government manipulators always do this for the importers and exporters so they can position themselves on the break because the rise was too fast for them. Classic Japanese yak yak for their Biz base; nothing new here as they have done this for decades.

 

www.traderzoo.mobi

Thu, 11/20/2014 - 22:21 | 5472173 Yen Cross
Yen Cross's picture

   Yes.

Fri, 11/21/2014 - 01:08 | 5472705 hedgiex
hedgiex's picture

YES Sir, the juices are drying so move on until they fire again.

Thu, 11/20/2014 - 22:21 | 5472172 ebworthen
ebworthen's picture

Lost century.

Thu, 11/20/2014 - 22:23 | 5472181 suteibu
suteibu's picture

So far, at least.  With nothing on the horizon to suggest that will change.

Fri, 11/21/2014 - 07:08 | 5473009 winchester
winchester's picture

lost humanity*

 

fixed it for you.

Thu, 11/20/2014 - 22:24 | 5472187 FuzzyDunlop21
FuzzyDunlop21's picture

BTFD its unstoppable now. 120 here we come bitchez!

Thu, 11/20/2014 - 22:26 | 5472189 Keltner Channel Surf
Keltner Channel Surf's picture

OK, yes, we said we wanted to go to hell, but by the slow, scenic route, please . . .

Thu, 11/20/2014 - 22:41 | 5472247 yogibear
yogibear's picture

Translation: The Yen is collapsing and we are losing control of it.

Come on Japan we all know your dancing with hyperinflation as even you citizens rush to dump the Yen.

It's what happens when you dance with the devil (US federal Reserve).

Thu, 11/20/2014 - 22:47 | 5472262 Seasmoke
Seasmoke's picture

Great. That means Gold should be surging as well.

Crickets.

Thu, 11/20/2014 - 22:48 | 5472267 tok1
tok1's picture

if there some big players that want to mess with BOJ.. they should take it back above 119.... Mondays holiday make 120 when Japan comes back.... tpp ut the BOJ under pressure for their buying...

Thu, 11/20/2014 - 22:54 | 5472287 MeBizarro
MeBizarro's picture

Japa is what is going to eventually tip the boat over first although I haven't seen a coherent narrative though that plays out the alternatives and over the time scale.  

Thu, 11/20/2014 - 23:41 | 5472470 moneybots
moneybots's picture

"YEN WEAKENING OVER THE PAST WEEK HAS BEEN TOO RAPID"

 

Just what is the speed limit on a collapse?

Fri, 11/21/2014 - 02:24 | 5472813 medium giraffe
medium giraffe's picture

Going by GBP in '08 I'd say 2000 pips a month maybe? Yen is only doing half that so I hope he's wearing fire retardant pants.

Fri, 11/21/2014 - 00:06 | 5472559 disabledvet
disabledvet's picture

"Going down swinging." Be interested to see what in fact Japan does here.

 

Hope they succeed too.  The USA has a lot more nuclear power plants and a much worse indeed total absence of an "energy policy."

The only reason the USA's so called "monetary policy" of DEBASEMENT hasn't hyperinflated the USA is a: not for lack of trying and b: an accident of history.

 

No one is stepping up to the plate and putting a halt to the In Your Facie corruption of the American War Effort.  Nothing says that better than the (albeit few) Yen rallies in spite of Fukushima.

Fri, 11/21/2014 - 00:30 | 5472622 The Blank Stare
The Blank Stare's picture

And all the average worry about is the price of coffee going up in January.

Fri, 11/21/2014 - 02:20 | 5472807 medium giraffe
medium giraffe's picture

Thanks for the pullback, much appreciated!

Fri, 11/21/2014 - 06:52 | 5473001 goldhedge
goldhedge's picture

"Too fast" that other countries are doing a double take.

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