Yes, quantitative easing is what just happened under everyone’s nose. The #JPY interventions of this past week effectively injected about 100 billion #USD into the global financial system that previously was not circulating. Why? Because #Japan MOF selling reserves to fetch #USD that can then be sold in the market…
Tag:#Japan
EXPLAINING AND SIMPLIFYING THE JPY (COUNTERINTUITIVE) “DOOM LOOP”
Last week, I ventured a bit too deeply into the plumbing of the global financial system with the article “THE JPY (COUNTERINTUITIVE) DOOM LOOP – THE MORE JPY LOSES VALUE, THE MORE LEVERAGE IS FORCED TO COME OFFLINE, THE MORE THE JPY LOSES VALUE” and I apologize to all those…
THE JPY (COUNTERINTUITIVE) DOOM LOOP – THE MORE JPY LOSES VALUE, THE MORE LEVERAGE IS FORCED TO COME OFFLINE, THE MORE THE JPY LOSES VALUE
Almost 9 months ago now in the post “$JPY CARRY TRADE – THE BIGGEST FINANCIAL TICKING TIME BOMB OF ALL?“, I tried to explain how, in the current market conditions where the shortage of quality collateral assets is becoming incredibly scarce, a depreciating #JPY would have put the ginormous and…
HOW LONG CAN THE FED DELAY JAPAN’S (INEVITABLE) ECONOMIC IMPLOSION?
The USD dollar keeps strengthening and currently, the $DXY index is trading again above 105 or up ~0.77% in the past 5 days. What about the $USD / $JPY exchange rate? It’s only up ~0.14% while, instead, it should already be trading above 152, also considering the move in US…
WHY IS #JAPAN SO SCARED ABOUT $JPY CROSSING 152 AGAINST THE $USD?
Crossing a specific FX level isn’t usually a “big deal”. What would be the difference for a country between settling payments at 151.95 or 152.05? Intuitively, it’s quite small. However, there are 2 specific markets where a “round number” can be a very big deal: derivatives and margin lending. Why?…
WHY A HISTORICAL $JPY CURRENCY CRISIS IS AT THE DOORSTEP OF #JAPAN
Imagine you hold an asset of any type. At the moment, the asset XYZ is worth 1M$ according to the price quoted on the exchange. Now, what would be your instinctive reaction if you suddenly discovered that your asset XYZ is instead worth 100k$, but you can still go to…
“Oops!… I did it again!” – #BOJ DANGEROUS SCHIZOPHRENIA
The Bank Of Japan (#BOJ) attempted to have its cake and eat it too, again, but this time, they didn’t have the luxury to do so anymore. The #BOJ had to decide which one to save between Japan’s economy and the global #stocks bubble, as we discussed last week (article…
ARE WE GOING TO SEE THE #FED FIREFIGHTING A #BOJ HIKE THIS WEEK?
This week we are going to have such a parade of central bank decisions on the menu: #RBA, #BOJ, #FOMC, #BOE, and #SNB 😵💫 All eyes will surely be on the #BOJ and the #FOMC. I do expect they will play “good cop bad cop” with market emotions. 🤭 The…
THE #BOJ DILEMMA – SAVE #JAPAN OR THE GLOBAL #STOCKS BUBBLE
This is it, the point where the #BOJ cannot kick the can down the road any longer has arrived. As you know, I have written many times about the #BOJ, warning of the consequences of their unbelievably reckless actions. 🚩 $JPY CARRY TRADE – THE BIGGEST FINANCIAL TICKING TIME BOMB…
WHAT CAN SAVE #STOCKS FROM A HISTORICAL IMPLOSION ONCE AGAIN?
It’s no mystery anymore. What matters to low-popularity politicians in charge of government and seeking reelection is a #bullish #stockmarket until after the election date. From #Japan to the #US, from the #UK to #Germany, what do all of them have in common? The government in charge is dealing with…