Home > Feb 2018 > Feb 2, 2018 BoJ tried to lower Bond Yields with Unlimited buying, Futures down .60%

Feb 2, 2018 BoJ tried to lower Bond Yields with Unlimited buying, Futures down .60%

February 2nd, 2018

Kuroda was in buying up Bonds (are there any left the BoJ HASN’T already bought?) to try and move Japanese Bonds off one year highs. Our 10 year is at 2.79% as we move into NFP data this morning. IMHO really so much of this is China pulling away from buying up Debt cuz they are slowing and the debt problem over there is getting so big. FWIW, Shanghai FUtures actually got a bit of love, little bit up as we move into the Chinese New Year in two weeks. Bitcoin is now 8.290 ouch…not a good week at all for them. AMZN will be the test if the Big Money will be selling their chips and leaving the Table, after beating earnings it was up AH at 5.61%..if it closes down tomorrow..this Bear may finally smile cuz the Central Bankers Science Experiment is done.

Feb 2018

  • Trading_Nymph

    In April Kuroda will find out if he will be asked to stay on, from Reutuers..Japan government to submit BOJ head nominees mid to late February: sources
    Yoshifumi Takemoto, Leika Kihara
    4 MIN READ

    TOKYO (Reuters) – Japan’s government will likely present to parliament its nominees of next central bank governor and deputy governors around mid- to late February at the earliest, sources familiar with the matter say.

    A man walks past the Bank of Japan building in Tokyo, Japan January 15, 2018. REUTERS/Kim Kyung-Hoon –
    There is a strong chance Bank of Japan Governor Haruhiko Kuroda will be reappointed when his five-year term ends in April, given premier Shinzo Abe’s recent comments praising him for boosting growth, government and parliament sources say.

    But this is by no means not a certainty, the sources say. While many in the market are betting on Kuroda’s reappointment, some see the chance of other candidates such as Etsuro Honda, Abe’s former aide who has expressed interest in the post, landing the job.

    Kuroda and his two deputy governors – career central banker Hiroshi Nakaso and former academic Kikuo Iwata – will see their terms end on April 8 and March 19, respectively.

    Nominees for such high-profile positions need approval by both houses of parliament to become effective. The government usually submits its nominees for various posts in two rounds.

    The BOJ nominees are likely to be in the second round and won’t be submitted to parliament until the first round gets approved, which may take until mid-February, the sources say.

    That means the government’s nominees for BOJ governor and deputy governors won’t be presented to parliament until later this month or even early March, they say.

    “It might not come until late February,” said a ruling party lawmaker familiar with the process, a view echoed by two other sources who spoke on condition of anonymity.

    The timing will depend much on how smoothly the government can push through parliament the state budget for next fiscal year and find time to take the nominees’ list for vote.

    It is a near certainty the government’s nominations will get the two-thirds majority needed to pass parliament, as Abe’s ruling coalition has enough seats in both houses of Diet.

    The choice of the new BOJ leadership will be crucial as it would set the path of monetary policy and affect how quickly the central bank could follow in the footsteps of its U.S. and European peers in dialing back crisis-era stimulus steps.

    While Kuroda has dismissed the chance of an early exit from easy policy, analysts see his reappointment as heightening the chance for a slow but steady shift toward monetary normalization.

    The choice of candidates with more radical views like Honda, an advocate of big fiscal spending financed by faster central bank money printing, may jolt markets as investors may see it as a break away from the current policy framework, analysts say.

    The government will likely fill one of the two deputy posts with a career central banker with deep expertise on markets and technicalities of monetary policy, the sources say.

    A reappointment of Nakaso or an appointment of BOJ Executive Director Masayoshi Amamiya, who masterminded many of the bank’s monetary policy steps, are seen as possibilities, they say.

  • Trading_Nymph

    Reuters…JGBs pare losses as Bank of Japan offers “unlimited” buying to curb rising yields
    Reuters Staff

    3 MIN READ

    TOKYO, Feb 2 (Reuters) – Japanese government bond prices recovered from earlier losses after the Bank of Japan acted decisively on Friday to curb a rise in bond yields, offering “unlimited” buying in long-term Japanese government bonds.

    Heavy buying of JGBs raises the price of bonds to force down their yield, an essential element of the BOJ’s ultra-loose yield curve control (YCC) policy.

    It was the first time in more than six months that the BOJ has conducted special operations to buy bonds to achieve the yields it wants to see, rather than the auctions used in regular operations – a powerful show of force to direct the market.

    On top of that, the BOJ increased the amount of its planned buying in five- to 10-year JGBs to 450 billion yen from the 410 billion amount it has favoured since late August.

    Following the BOJ’s operations, the price of the 10-year JGB futures rose to as high as 150.31 from the day’s low of 150.09. It was up 0.11 on the day.

    The benchmark 10-year cash JGB yield edged down to 0.090 percent, the same level as its previous close, from 0.095 percent touched earlier.

    JGB yields have risen in recent weeks, in line with global peers, on rising expectations that the world’s central banks are increasingly leaning towards winding back stimulus as the global economy gains momentum.

    Investors have started to speculate that the BOJ could also be moving towards an exit from ultra-easy policy, although BOJ Governor Haruhiko Kuroda has denied that he was considering such a major policy adjustment in the near future.

    “I think the BOJ took pre-emptive steps to fend off further rises in JGB yields. JGB prices recovered so I think it was a success at least for now,” said Naoya Oshikubo, yen rates strategist at Barclays.

    “But given that the main reason for higher yields comes from foreign bonds, the market will likely remain capped,” he added.

    Indeed the impact of the BOJ’s action quickly evaporated in the currency market, on which the BOJ has less control.

    The yen briefly weakened to 109.66 per dollar from around 109.45 but quickly pared its losses

  • panther341

    Jobs report was good – added alot of jobs and wages went up. This is sending bonds down some more.

    AAPL went red after earnings. AMZN still quite green 1 hour before the close.

    bitcoin a mess.

  • panther341

    We get fog here – and I am well over 100 miles from the coast alot in the fall and winter – not so much the rest of the year. The fog this winter is often instead of rain as we are going into a drought. Some parts of Texas are already in extreme drought and we have had wildfires. so instead of rain we get fog.

    Our 3 snows this year were all less than 1 inch – which is the equivalent of about 0.20 of rain each – except the last one which was really only ice and a total of 0.15. Just enough to shut everything down and not enough to be real moisture.

  • panther341

    even though AMZN is green, this is a pretty red day. Yesterday started red and ended green. Not today.

    Happy Ground Hog Day – today not like the movie LOL

  • panther341
  • Trading_Nymph

    If the Bull saw his shadow do we have 30 more days of sell off, lol. Monday will be the test for AMZN. If it can get below pre earning numbers it will be the canary finally dying.

  • Trading_Nymph

    That poor USD has been under so much pressure…anything would do it. lol

  • panther341
  • panther341

    CNBC, including Cramer – blaming selloff in stocks on the rise in rates, – the selloff in bonds. SO today with the dollar up, we had bonds down, gold down and stocks down. Silver was down over 3%. Oil was also down.

  • panther341
  • Trading_Nymph

    BoJ couldn’t push down their Bond Market imho and everyone is starting to see the writing on the wall finally.

  • Trading_Nymph

    lol, I saw that.

  • Trading_Nymph

    We are back in Drought too. 100 miles from coast and fog still hits..wow.

  • Trading_Nymph

    bitcoin, truly a mess.