Markets Explode Higher As Bank Of Japan Goes All-In-er; Increases QE To JPY 80 Trillion

UPDATE: *NIKKEI 225 EXTENDS ADVANCE TO 5%

NKY is up 1000 points from FOMC

 

 

 

and what do u expect to happen to JGBs when Stocks rip 1000 points... yep they're rallying!

  • Yield on 10-yr govt bond declines 3.5 bps to 0.435%, while 20-yr yield also slides 3.5bps to 1.285%, both lowest since April 2013.
  • 5-yr yield falls 1 bp to 0.110%, level unseen since March 2013
  • Lead 10-yr bond futures climb to record 146.78

 

In a surprise move given all the recent congratulatory bullshit from Abe and Kuroda on breaking the back of Japan's deflation and bring about recovery (forgetting to mention record high misery index, surging bankruptcies and a crushed consumer), the Bank of Japan (by a 5-4 vote) raised its bond-buying program from JPY 70 trillion to 80 trillion... and triple its ETF buying to JPY 3 trillion. This move, on the heels of more confirmation of broader foreign asset purchases in Japan's GPIF sent USDJPY instantly gapping 1 big figure higher to 110.30 and Nikkei futures instantly rose 400 points. S&P futures are also surging. Gold and silver are tanking and TSY bonds are selling off.

  • *BOJ UNEXPECTEDLY TARGETS BIGGER EXPANSION OF MONETARY BASE
  • *BOJ TARGETS 80T YEN ANNUAL EXPANSION IN MONETARY BASE
  • *BOJ SEES RISKS IN CHANGING DEFLATIONARY MINDSET
  • *BOJ AIMS FOR ANNUAL INCREASE OF 80T YEN IN JGB HOLDINGS
  • *BOJ EXPANDS PURCHASES OF ETFS TO 3T YEN
  • *BOJ: ETFS TRACKING JPX-NIKKEI INDEX 400 ELIGIBLE FOR PURCHASE
  • *BOJ: WILL CHECK RISKS, ADJUST POLICY AS APPROPRIATE

BoJ Statement

This was a double whammy though as Japan also announced it was shifting GPIF asset allocations...

From this...

 

To this...

  • GPIF’s current portfolio targets are 60% for Japanese bonds, 12% each for local and overseas stocks, 11% for foreign bonds, 5% for short-term assets
  • GPIF will today boost allocation targets for Japanese and foreign stocks to 25% each, while reducing its domestic debt allocation to 35%

And the result...

  • *YEN DROPS TO 6-YR LOW AT 110.12 PER DOLLAR AFTER BOJ
  • *NIKKEI 225 SURGES MOST SINCE JUNE 2013 AFTER BOJ ADDS TO EASING

Nikkei 225 is up 700 points from this afternoon's 2-week old headline and broken markets!!

 

S&P futures are surging...

 

Gold was pushed lower...

 

Ironically Gold is up in JPY terms...

 

Treasuries are being sold heavily...

 

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It seems money does grow on trees...

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A gentle reminder - Blackstone's Larry Fink met Shinzo Abe two days ago... (the same Blackstone that warned of carnage if selling ever begins in corporate bond land)... clearly the Japanese panicked!

Welcome to your fundamental-driven markets!! The farce is almost complete. The day after The Fed stops QE, The BoJ raises its bond AND STOCK buying program!!!!

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Coming soon...

 

Even though Kuroda said Japan could control hyperinflation through monetray policy...