When stocks absolutely and completely have to go up, there is only one thing for it: the spurious headline from Nikkei (aka the new owner of the Financial Times). It is 2am in Japan but still, after Thursday's headline that:
- BOJ IS SAID TO SEE LITTLE IMMEDIATE NEED FOR ADDING STIMULUS
It is now time for the diametrically opposite:
- BOJ MAY NEED TO EASE AGAIN WITH FED DELAY, NIKKEI SAYS
and sure enough, USDJPY jerks higher and US equities hit the day's highs.
[6]
The supreme irony here is in the justification: according to Bloomberg, the possibility of stronger yen, prompted by lower expectations of Fed rate increase this year, may prompt further easing, Nikkei reports, citing unidentified BOJ watchers.
What everyone seems to have missed, is that by being the global funding currency, the Yen has actually plunged on lower expectations of a Fed rate hike. In other words, what we are supposed to believe is that the lower Yen has prompted the BOJ to seek... a lower Yen.
