Blackrock Turns Its Back On Japan Leaving Kuroda Scrambling

Tyler Durden's picture

Things are going from bad to worse for the efficacy of the grand - and failed from the beginning - experiment known as Abenomics. As Bloomberg reports, Larry Fink's Blackrock has changed its stance on investing in Japan, and joins Citigroup, Credit Suisse, and LGT Capital Partners, the $50 billion asset manager based in Switzerland in their decision to head for the exits.

Ironically, Blackrock's decision comes only a few months after blogging about "The Case for Investing in Japan", in which they explicitly cited increased demand for Japanese stocks.

INCREASED DEMAND FOR JAPANESE STOCKS

 

The BOJ and other large institutions have increased their investments in Japanese equities. Meanwhile, the recent successful Japan Post initial public offering has renewed domestic interest in equities and likely increased demand for Japanese equities by investors around the globe.

This is the latest in a long list of setbacks for Japan in their quest to inflate consumer prices and their stock market. Foreign investors have been getting out of the market all year long, as concerns about the global economy and a strenthening yen continue to be at the forefront. So far they've dumped $46 billion in shares according to Bloomberg.

 

Meanwhile, Japan is doing all it can (according to the Abenomics playbook). NIRP, Japan's latest central bank tool form the proverbial "toolbox" has been fully implemented, with a negative 10Y bond auctioned just last month. So far it is not enough.

It has also apparently done enough damage on the fixed income side to sway the worlds biggest state investor, their very own Government Pension Investment Fund, to move more into equities. However with other major players not wanting to be invested in Japan, the BoJ may very well have to increase their ETF holdings to roughly 100%.

 

But most entertaining would be Peter Panic's reaction. A photographer's s rendering of Kuroda's face upon hearing that even his most devoted supporters are now giving up on him would probably look like the change from this...

 

... To this

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knukles's picture

Poor Japan.  All those people abandoning her must be racists.
Although they are looking for comfort women I hear tell.

Cognitive Dissonance's picture

The rats are always the first to leave a sinking ship.....even if it still hasn't left the dock.

knukles's picture

OMG Cog.  You just caused a flashback to an old R Crumb cartoon of the Chinese rocket ship powered by a bazillion Chinese blowing into a collective pipe, who all looked like identical rats.
As best I can remember it.

froze25's picture

"They" always said the unraveling of the world FX markets would start with Japan.

JamesBond's picture

So they did a pump and dump and got away with it. Sweet for them. Sour for the fool born everyday.

Jb

tc06rtw's picture

   
 …  Is there found inflation or deflation in the price of wakizashi swords?

Davidduke2000's picture

Japan will fall so hard and will take its population with it as most pension funds are invested in government bonds.

GoldenGoosed's picture

Yea it is a crowded trade government incompetence!

CHoward's picture

"No body knows the trouble I've seen..."

 

Old Negro gospel

Janet Shalom Bernanke's picture

When he does finally commit HariKari, I hope the blade is very dull.  and they feed his remains to the pigeons, who then fly around Tokyo shitting all over the Japanese people.  It would be a very fitting end to a very corrupt and very stupid animal Kuroda.

 

 

Cognitive Dissonance's picture

Anyone who takes advice from Paul Krugman can't be all that bad.

/sarc

nmewn's picture

"Ha! I will bury you in an ocean of yen!" - Shinzo Abe

Well...yeah, thats kinda what we're sayin.

Its 312 yen for a fuckin Big Mac ;-)

Cognitive Dissonance's picture

That's like $3.00 USD for a Big Mac.

Personally I've never understood why a country essentially denominates its currency in pennies.

knukles's picture

A decimal here and a decimal there and pretty soon you're talkin' about real money!

JamesBond's picture

Inflation is showing up in the size of portions. At lunch just now, Gusto gave me a small salad bowl 1/3 full, a small soup bowl 1/3 full, and a cup with vegetable portion of 1 tablespoon. Kid you not. Yet friends say the economy is on the mends. NHK says so.

GOb savn the queee

Bobportlandor's picture

Timefor JP to sell some foreign exchange reserves. Time for QE4

Soul Glow's picture

God save the nikkei!

maltafathead's picture

Japan does not have a free economy. Everything is hedged about with restrictions, petty rules, monopolies and exemptions for the right people. Anybody who invests in Japan needs a brain scan.

Around 5 years ago it eagerly started implementing new restrictions on foreign residents who wanted to invest in funds/financial groups outside of Japan. If the company didn't have a branch in Japan then the Jp authorities told the company foreign residents could not invest in it. Yes they are little dictators. Some things have never changed.

The real story that never finds its way into the Jp media is the fact of the Yakuza economy that is still largely untaxed. This filthy cesspit has a lot to do with Japanese economic downturn and the staggering incompetence you find in Japan at all levels. Trillions of yen are never taxed and exit the country regularly when they are not being laundered at home.

It is a national disgrace that the organised crime groups are legally allowed to operate. They operate openly within sight of everyone including the tax office. They have strong links to some politicians who are influential.

It would be fairly simple for Japan to implement anti racketeering laws as happened from around 70 years ago in the USA. Their disgusting politicians and governments do not do that and allow these bloodsucking scumbags to do their illegal activities in the open.

Again - it's the average Tanaka San who pays for all of this. Plus the foreign residents. I keep hearing Americans and Canadians screaming about Uncle Sam's tax policies and this website also has a number of articles on including the citizenship issue and how Yanks are scrambling to get rid of their passports.

However, if you have resided for 5 years out of the last 10 in Japan as a foreign resident, Japan gets to tax you as a permanent resident even though 99 percent of the foreign residents do not have actual PR status and will never receive it.

It is tightly controlled and living in Japan for 10 years for example, speaking Japanese and being a good resident who pays everything will not guarantee you jack.

YET you are deemed a permanent resident for tax purposes under the 5years out of 10 years residency rule. Even though you have not one right of PR and indeed will not be classified as PR for anything else but tax. Lovely people, the Japanese politicians and governments.

Tachyon5321's picture

Krugman should have the Japanese dig a deeper hole to jump in....

nathan1234's picture

LOL

Good idea if the Japanese decide to take him along into their deeper hole

silverer's picture

I remember that Blackrock recommendation.  It was a psuedo-trendy evaluation at the time, but even Blackrock now recognizes, apparently, that basic math is going to win out when it comes to calculating hard numbers regarding basic valuation.  Somewhere, for something to happen, somebody has to do real work.  The printing press does not construct an economy, man hours of labor does.

SKIDADDLE's picture

All these huge global investment banks are looking for places to put their huge sums of paper money to work.  But as these fascist systems around the world continue to fail and central banks no longer exhibit good control over their markets, the big inside money exits stage right before things blow up.  These fascist systems have hollowed out their respective econonmies to the point where there are few growing, productive businesses left and without growth these systems fail miserably.  This last bull market has relied almost totally on financial engineering by the central banks and their partners in crime, the major money center banks for any semblance of economic growth, but it has been all a ruse, just an overly financialized paper money game and lots of malinvestments.  For more market analysis, http://marketscope.ca/

nathan1234's picture

Kuroda has no honor left. He has insulted his ancestors by taking his country to ruin.

I guess he does not even have the courage to commit seppuku.

Japanese honor was lost fter WW2, through it's politicians and officials being subservient to those who run America.