Following the two theatrical speeches eaelier, we are absolutely nowhere closer to a resolution now than we were 2 hours ago. Perhaps this is why the market is not too happy and as of minutes ago, the USDJPY tumbled to new all time lows (except for that illiquid print from March 17) of 77.89, with the market set to test Noda's repeated bluster that he will finally do something against the "one way Yen." We are not holding out breath. And to confirm that a perfect storm of sorts is on the horizon, adding to the increasing illiquidity in the US and Europe, is the news out of China that 7 day repo rates just surged by 160 bps overnight, the most since July 5, to 6.80%, as the market awaits the selling of CNY 1 billion in 1 year bonds at 10 am Chinese time. If $155 MM of a liquidity outflow can move the needle in China by almost 2%, then we are in deep trouble.
Update: the BOJ may have just intervened. Just look at that chart
Update 2: perhaps not an intervention as we are now getting reports that Macau has been hit by a blast according to Xinhua
Crazy stuff people