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NikkeiSoarsByOver 400 Points As BOJ RedirectsAttentionFromQEToLoans
Clearly boxed in by the concern that any increase in their QE program will shift sentiment from stimulus to monetization, theBoJkeptthemoney-printingthesame but redirected focus by raising the ceiling on their bank lending facility (from JPY3.5 trillion to JPY 7 trillion). This is being presented to the public as dovish despite the balance sheet recession’s debt minimization – not profit-maximization – mantra as was oh so well illustrated by the dismal GDP prints since Abenomics has been in existence. It’snotlikeJapanneeds "low-interest" rateloans… are theirrateshigh? Of course, in order to maintain some semblance of hope and belief in this new "common knowledge", USDJPY was smashed higher (running stops over 102.50) and that leveraged Nikkei futures up over 400 points in the space of a few minutes. S&P futures are modestlyhigher but EM FX is drifting lower.
Notice the initial disappointment in JPY and Nikkei with no additional stimulus only to be ‘managed’ higher…
The question on everyone’s lips, of course, is – what is the BoJ’s half-life?
S&P futures and Emerging Market FX ain’t buying it for now…
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