It was a brief 24 hours ago that we suggested putting on a Nikkei-S&P convergence arb with the provision that "this is the cheapest and easiest way to hedge what is becoming increasingly inevitable: that the BoJ will have no choice but to follow our own Fed down the rabbit hole of money printing." A few minutes ago the Dow Jones released the following: "The Bank of Japan will consider taking additional easing steps to cope with a rising yen and falling share prices, the Sankei Shimbun reported in its morning edition." The BOJ will hold an emergency meeting policy meeting at 5 am GMT at which point the specifics of the easing measures will be announced.
More from Dow Jones:
One likely way that the central bank may do this is to expand the funds it offers to financial institutions at a 0.1% fixed rate to Y30 trillion from Y20 trillion, or lengthen the program to six months from three months, the report said.
The report also noted the BOJ may announce the new measures at an emergency policy board meeting ahead of an upcoming meeting between Prime Minister Naoto Kan and BOJ Gov. Masaaki Shirakawa.
As this is certain to ignite the nitrous under the Nikkei (and punish the JPY, as the BoJ enters the final lap of the monetary destruction race to the deflationary bottom), those who put on the convergence trade as suggested are likely to see imminent profits.