Kuroda Suggests "No Limit" To More NIRP Measures To Stall Japanese Bond Yields, Stocks, USDJPY Plunge

Tyler Durden's picture




 

With Nikkei 225 down 800 points from post-NIRP highs and USDJPY having almost roundtripped, there is little wonder that Japanese government bond yields are collapsing to imply considerably deeper NIRP to come. With 10Y JGBs on the verge of a negative yield, 2Y yields are now at -17bps (well below Kuroda's -10bps level). Japanese bank stocks are a bloodbath with Nomura leading the way lower.

 

We're gonna need more NIRP...

  • *JAPAN'S TOPIX INDEX FALLS 3.3% TO 1,404.75 AT MORNING CLOSE
  • *JAPAN'S NIKKEI 225 FALLS 3.1% TO 17,194.17 AT MORNING CLOSE

 

And that is what bonds are implying...

  • *JAPAN'S 2-YEAR YIELD FALLS TO RECORD MINUS 0.17%
  • *JAPAN'S 10-YEAR BOND YIELD FALLS TO RECORD 0.045%

 

With the entire curve to 8Y below BoJ's -10bps level...

 

And Japanese bank stocks are plunging...

 

Led by Nomura's 11%-plus plunge - the most since 2011...

 

As none other than Nomura itself admits, Further rate cuts likely needed to attain inflation target...

In its newly released Outlook Report, the BOJ is forecasting attainment of its +2% inflation target by FY17 H1. However, we expect the ongoing improvement in the BOJ's preferred measures of the underlying trend in prices–ie, the core-core CPI (headline CPI ex food (except alcoholic beverages) and energy) and headline CPI ex fresh food and energy–to grind to a halt. Additionally, the base wage increases negotiated in this spring's unionized wage negotiations, which BOJ Gov. Haruhiko Kuroda is closely monitoring, look likely to be somewhat restrained. Given such an environment, the BOJ will likely ease again...The BOJ seems to have the latitude to cut its interest on excess reserve (IOER) rate to at least -0.5% or thereabouts.

Wow - that did not take long...

  • *KURODA: POSSIBLE TO CUT NEGATIVE RATE FURTHER IF NEEDED
  • *KURODA: NO LIMIT TO MONETARY EASING MEASURES
  • *KURODA: WILL EXPAND EASING IF NEEDED FOR PRICE TARGET
  • *KURODA: BOJ WILL DO WHATEVER IT CAN TO REACH PRICE TARGET
  • *KURODA: BOJ TO KEEP LOOKING FOR INNOVATION IN MEASURES
  • *KURODA: BOJ NEEDS TO DEVISE NEW TOOLS IF MEASURES INSUFFICIENT

Who could have seen that coming?

"Peter Pan" policy has officially arrived.. .and the market ses straight through it...

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Tue, 02/02/2016 - 22:22 | 7133007 Pheonyte
Pheonyte's picture

Nikkei is getting blowtorched right now: -587, -3.3%

Tue, 02/02/2016 - 22:27 | 7133039 Soul Glow
Soul Glow's picture

Hara kiri you fuckers!

Tue, 02/02/2016 - 22:38 | 7133097 Boris Alatovkrap
Boris Alatovkrap's picture

Namyo Horen Gekkyo! Tora!

Tue, 02/02/2016 - 22:48 | 7133108 remain calm
remain calm's picture

So the most indebted nation in the world, whom has no way of getting out of debt, NONE. Wants you to pay them money to hold their 10 year note, which they promise to pay back in 10 years. NOW THAT IS FUCKING CRAAZY! Is their any sane MAJOR Business media that is going to point this out so the stupid people, most of America can get it, they really are unethical, And why isn't every Japane investor selling their bonds and buying Gold or for that matter cow shit because it is way more valuable than that note. God help them!

Tue, 02/02/2016 - 22:48 | 7133136 Dark Daze
Dark Daze's picture

Err, no, actually the US is the most indebted nation in the world when you include unfunded liabilities. But yes, Japan is fucked, thoroughly fucked and when the yen finally blows up, or the Yuan blows or the dollar blows up it will be grim times indeed.

Tue, 02/02/2016 - 23:21 | 7133219 remain calm
remain calm's picture

When i Think about the price of gold and how its only at 1120 and think it makes absolutely no sense. Then I think about the the movie the Big Short and I remember how frustrated the people who saw it coming were when the mortgage defaults were increasing dramatically in nunmber and the bonds were actually getting stronger. Then I look at gold and I think ya those fuckers may get their way now but eventually the market forces will crush them. So I wait knowing, like Dr Burry, it has to happen without a doubt. FUCK YOU Bernanke, Yellen, Draghi, Kuroda. FUCK YOU you stupid sick fucks who will bring down the whole world economy. A tortured death, none of you are worthy of, only eternity in hell would be justice.

Tue, 02/02/2016 - 23:25 | 7133286 Fred Hayek
Fred Hayek's picture

Amen.
And may I add, fuck you to all the "financial advisors" who have known for quite a while that all this can't go and who yet are leading all their clients to the slaughter.

Wed, 02/03/2016 - 00:21 | 7133483 Groundhog Day
Groundhog Day's picture

You give too much credit to financial advisors. Most are just sales people who sell house products like they are taught. ask one what fractional reserve banking is and you'll know what I mean

Wed, 02/03/2016 - 00:31 | 7133512 Rodent Free Corps
Rodent Free Corps's picture

Happy Groundhog Day, btw. 

Wed, 02/03/2016 - 01:52 | 7133691 slightlyskeptical
slightlyskeptical's picture

Seeing what was what was easy. Trying to get clients to think you are sane while always calling out a rising market is another.

Wed, 02/03/2016 - 00:39 | 7133527 Fish Gone Bad
Fish Gone Bad's picture

Its called politics: When people knowingly go along with something they know to be wrong.

Wed, 02/03/2016 - 09:15 | 7134287 Ghostdog
Ghostdog's picture

Agree most off these doooshbags are shoe salesmen especially the Edward Jones retards but we run a comms fund and an RIA and have had our clients on the RIA side 50% CASH since March 2015. So there are exceptions :) No need to really be long this thing until the Fed does QE4. negative rates wont do shit but create s short term pop

Tue, 02/02/2016 - 23:38 | 7133349 Mr Pink
Mr Pink's picture

Watched it for the fifth time last night. I was thinking that the reason I love the movie so much is because I feel their pain

Wed, 02/03/2016 - 02:40 | 7133766 Augustus
Augustus's picture

all of asia and europe are showing red.

Gold still slightly down, no rally.  However, maybe that is considered a 'relative" ralley?

Wed, 02/03/2016 - 02:58 | 7133795 FreedomGuy
FreedomGuy's picture

Give it time. You may have your day, yet.

Wed, 02/03/2016 - 03:24 | 7133830 OldPhart
OldPhart's picture

I look at Gold, up $60 over 30 days, vs silver, basically flat.

Gold moved, silver didn't, there's something about silver the bankers are adamant about keeping around $14.

To me, that's a sign that I need more silver.  Fuck gold, it's moving, silver is being repressed, big time.

Wed, 02/03/2016 - 01:07 | 7133601 Marco
Marco's picture

If you don't want them the BoJ can simply buy the couple of percent they weren't already buying, or give Belgium some money to do it for them if they want to keep up appearances. For all practical purposes the Japanese government bond interest rates are irrelevant at the moment.

The actually relevant BoJ policy tools are the private bond purchases and the short term deposit rates.

Tue, 02/02/2016 - 22:45 | 7133119 knukles
knukles's picture

Be aware ... Very aware ...
NIRP is a fungible economic condition.  It is like a disease.  It can migrate from one country to another seamlessly.  For many, many reasons.
Get ready (for many, many reasons) for NIRP here at home.   Big Time   Bill Dudley's already told us.

Tue, 02/02/2016 - 22:50 | 7133147 xrxs
xrxs's picture

Race to the bottom where the bottom is negative infinity.

Tue, 02/02/2016 - 23:56 | 7133412 Almost Solvent
Almost Solvent's picture

Math is an absolute bitch

Tue, 02/02/2016 - 23:26 | 7133292 Uchtdorf
Uchtdorf's picture

Is Kuroda offering prayers for his country or a suicide attack on it? The latter before the former.

Wed, 02/03/2016 - 01:27 | 7133373 Janet Shalom Be...
Janet Shalom Bernanke's picture

I hope the Nikkei plunges deep into Kuroda's fuckashima blow hole.

I'm long Japanese samurai swords and body bags.

 

First the bond market ceases to function, then the stock market ceases to function, then the currency ceases to function, 

then society ceases  to be civilized, even the sleepy old people in Japan, who have been deafly silent as their stupid-ass gov't has destroyed their economy, will rise-up.    Can't wait to watch it.   

 

What's funny is, that these fools are the example that the Fed is following.

Their desperate actions have proven themselves not to work, yet they keep doing more and more and digging themselves in a deeper hole.

Instead of doing real economic reforms, they do these desperate acts because they know that they are past the point of NO RETURN.  The only way out is total currency failure.  Can't happen soon enough.    

 

Wed, 02/03/2016 - 03:28 | 7133834 OldPhart
OldPhart's picture

Ok, Zero Hedge, just who doesn't actually have an actual Samurai sword near the front door?  Who doesn't have an actual Samurai sword?  Who hasn't gone into the backyard to yell "hiya!" as you awkwardly swung it around a couple times?

Tue, 02/02/2016 - 22:22 | 7133008 ClassicCommodity
ClassicCommodity's picture

I WISH this was the end.

Tue, 02/02/2016 - 22:41 | 7133102 Bangin7GramRocks
Bangin7GramRocks's picture

"I'm gonna keep tickling you with this feather until you stop giggling."

Tue, 02/02/2016 - 22:51 | 7133149 Baronneke
Baronneke's picture

This is the End.......for markets worldwide.

Tue, 02/02/2016 - 22:23 | 7133015 Oldwood
Oldwood's picture

For years people saw zero as the floor rate on interest and couldn't imagine anything less. Now we have opened up a whole new world of possibilities. Shit is going to get very interesting.

Tue, 02/02/2016 - 22:41 | 7133104 malek
malek's picture

Just lack of imagination.

In 2001 I took a course "Financial Instruments 101" (for IT guys) and when getting to bonds, the tutor asked "how low can interest rates go?"
Everybody said zero.
Then he told us that Switzerland already had had an episode of effective -2% interest rates for foreigners, I think it was around 1980 - and the foreigners gladly paid 2% p.a. for keeping their cash in CHF and in a Swiss bank.

Nothing new under the sun.

Tue, 02/02/2016 - 23:04 | 7133205 Linglishboy
Linglishboy's picture

Japan is not Swizertland (Suisse)

Tue, 02/02/2016 - 23:28 | 7133302 Fred Hayek
Fred Hayek's picture

What should we expect from a country that names itself after Barry Switzer?!

Tue, 02/02/2016 - 23:31 | 7133322 tarabel
tarabel's picture

 

 

They did not. They named themselves after a cheese product.

Tue, 02/02/2016 - 22:23 | 7133017 Francis Marx
Francis Marx's picture

They say the world will ened in fire. But it looks more like from blood loss.

Tue, 02/02/2016 - 22:26 | 7133033 Soul Glow
Soul Glow's picture

Fiat paper burns hot!

Tue, 02/02/2016 - 22:24 | 7133023 Soul Glow
Soul Glow's picture

Krugman and his squad are about to watch the house burn down on them after telling us burning the house down would boost GDP.

Tue, 02/02/2016 - 22:45 | 7133125 knukles
knukles's picture

Krugman's an asshole

Tue, 02/02/2016 - 22:27 | 7133028 NoDebt
NoDebt's picture

So NIRP further reduces the Japanese government's borrowing costs without affecting stocks, FX or anything else (after a short 24 hour bounce)?  I'd call that mission accomplished.

Tue, 02/02/2016 - 22:44 | 7133117 Dark Daze
Dark Daze's picture

BOJ Doesn't NEED to borrow, Japan has the highest savings rate in the world. Did you miss the article on what this is really about? 

Wed, 02/03/2016 - 01:13 | 7133614 Marco
Marco's picture

Japan's private savings are part of the problem, someone has to have debt on the other side of most of those savings in a fractional reserve banking system (gold backed or not doesn't matter, only full reserve banking avoids that simple truth).

Wed, 02/03/2016 - 01:28 | 7133647 Canadian Renegade
Canadian Renegade's picture

Makes sense Marco. Never thought.of it that way. 

Wed, 02/03/2016 - 03:22 | 7133826 Augustus
Augustus's picture

That is only necessary if the savings are held in a form of debt instrument.  Lots of other assets available, just not quite as liquid.

Tue, 02/02/2016 - 23:55 | 7133408 Yen Cross
Yen Cross's picture

Don't feel stupid Nodebt. I'm absolutely in the dark with Gold.

 We know the scared shitless, gold trade. We know the inflation, higher rates, Gold trade. We, don't know the paper @ 500.00% gold trade. I think some margins are going to have to be covered.

Tue, 02/02/2016 - 22:28 | 7133051 stant
stant's picture

And the dows only down -85?

Tue, 02/02/2016 - 22:30 | 7133059 runswithscissors
runswithscissors's picture

Purple NIRPle

 

Tue, 02/02/2016 - 22:35 | 7133070 Kaiser Sousa
Kaiser Sousa's picture

laugh Kuroda u fucking moron....laugh!

wonder how much paper Silver and Gold theyre gonna have to throw in London and NY to keep the phony paper prices below $1130 and $14.30???????

http://www.livecharts.co.uk/MarketCharts/silver.php

http://www.livecharts.co.uk/MarketCharts/gold.php

Tue, 02/02/2016 - 23:09 | 7133223 FreeNewEnergy
FreeNewEnergy's picture

I've been bouncing the idea around in my head of settin my own price for silver  (I own some). How many FRNs would you need to trade off 10 oz. of .999?

My number is somewhere between $80 and $200. Anything under $80, I'm not interested. I might dispose of 10 oz. at $80, and then wait and see. Anybody else?

It's well past the time the actual owners of bullion start setting prices instead of letting the Comex cheat, lie, steal, etc. and fuck with the price. Let's see if we can start a movement. $80 is my low limit, which means I will be buying until it hits that.

Bring it.

Tue, 02/02/2016 - 23:29 | 7133309 Kaiser Sousa
Kaiser Sousa's picture

im right with ya'll...

in light of the fact that due to this ongoing fraudulent manipualtive scheme, we really dont knowTHE TRUE VALUE OF OUR REAL MONEY....

but until its priced in debt coupon dollar at least in triple digits u can kiss my ass caues i aint partin with a single fucking oz. ......

stay the course brethren....stay the course.......

 

Wed, 02/03/2016 - 00:25 | 7133491 BringOnTheAsteroid
BringOnTheAsteroid's picture

Here's the huge irony. NO amount of fiat currency is worth an ounce of gold and the longer this train wreck continues the more true this statement becomes.

Physical assets can only really be traded for other physical assets. While the dollar ponzi is alive you can get away with swapping your physical for large sums of fiat (for a while), but what do you do with the fiat? Put it in a bank? You'd have to be crazy to do this if you are US citizen.

Wed, 02/03/2016 - 01:24 | 7133631 Marco
Marco's picture

The value of money is what you can get for it.

The only way to calculate a "true" value for gold is if you assume it will become the M0 for the entire world again (and the world economy and leverage stays roughly the same regardles). Of course that's not going to happen and its value is purely based on fee fees, which is why the price is so easy to manipulate.

Wed, 02/03/2016 - 07:41 | 7134047 Dark Daze
Dark Daze's picture

They wll ultimately haveno choice but to revalue, upwards, by a great deal. As the article refrerred to pointed out, if you have a 200 Trillion debt with gold at 1,100 it becomes a 100 billion debt with gold at $65,000. It's either that or default, and I'm not sure they are brave enough to default in a country where the avergage number of guns per person is 5, and the citizenry has a history of not taking it.

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