Nikkei ends at 10-month low on BOJ tightening fears

ok so why if all stocks are down jpy rate against usd high?makes no sense to me.

@Eastman

Interest rates are climbing. That sucks liquidity out of the market.

Yen will start weakening again once the market realizes that there is no chance Kuroda is raising interest rates.

In the picture at the Tokyo Stock Exchange, why are all the men old and middle-aged, while the women are young, and of course, pretty in their kimonos?

@Hermitage Nads

Kuroda has no choice. Inflation is coming whether he likes it or not.

Kuroda’s only choice is which currency he will keep his final salary payment in.

Last month, the BOJ bought a record amount of JGBs. That to my mind is no “monetary tightening”, although bond yields did rise.

If the new head of the BOJ wants to hike short term interest rates, I should think she/he (who am I kidding, I don’t think the LDP will select a woman to replace Kuroda) will stop sucking up all the JGBs with printed money, before they do so.

This BOJ approach is ridiculous. They have had to buy record amounts of bonds to keep their cap on yields, even after allowing yields to rise to 0.5%. If the BOJ were to stop buying JGBs, JGBs will plummet.

If this is want Japan Inc is planning, the government will need something like the pension fund to start buying all these bonds instead of the BOJ. But to do that the pension fund would have to sell its other assets.

It is not going to be smooth sailing for whoever is idiotic enough to replace Kuroda, I imagine.

Kuroda has no choice. Inflation is coming whether he likes it or not.

theyve been saying that for 20yrs, Japan cant even reach 1% inflation.

domestic consumption will never grow until Japanese workers have the expendable income to spend,

their wages are actually getting smaller. increasing interest rates will make home loans more expensive meaning even less expendable income to families.

most 1st world economies are averaging around 6~10%. Japan still under 4%. when worldwide inflation settles where do you think Japan us headed again!?

very good!!, short the NIkkei!!!

Why the kimonos?

Why the kimonos?

You do realize this is Japan, right?

Talking about strong yen while still being 10% down compared to last year at the same time?

It’s ok I’m sure in another article soon they will claim the “weak yen” caused them to do something else.

The end of QE for a while and ETF purchases by the BOJ. The Nikkei is completely distorted anyhow. Must of been weird getting dressed up to watch the market drop. LOL

Kuroda has no choice. Inflation is coming whether he likes it or not.

Yeah, there is some inflation, but no wage growth. Kuroda stubbornly insists that inflation is transitory and mostly due to temporary commodity price rises, and that wages must rise by around 3% for inflation to sustainably hit the bank's 2% target.

If you really think the BOJ will raise rates, then why don't you put your money where your mouth is and short JGBs? They don't call it the "widow maker" for nothing.

Why the kimonos?

Because this is Japan. Kimonos are normal.

I predict - if the yen drops - the Nikkei could be testing 30,000 pts by years end. Just get that yen down as low as possible please with whatever levers you have, Kuroda-san!

@Eastman - You failed to understand this other day when I explained to you - when Kuroda let 10Y JBGs move towards 0.50%. This has a knock on effect to longer dated paper. People start to put money into bonds again. To do that, they sell stock. They also buy JPY to buy Bonds.

Get it now?

Love the kimonos, very nice to see.

Much of the time I wear Japanese clothing.

Kurodas term is up in a few months, and who knows how long Kishida will last. Market is starting to bet against low interest rates / easy monetary policy lasting much longer. Nikkei wont like that much at all.

@theresident

there are some good reminders in your comment. People fail to understand that bonds are bought in local currency and obviously stocks are sold in the world and reinvested into bonds.

The question is how did the” BOJ do this” and effect the JPY or can we assume the 10YR rate increase ROI had a trickle effect on longer dated bonds and “everyone” rushed in after the BOJ to buy Japan inc?