As we reported earlier, the USD/JPY spiked on the latest Nikkei market trial balloon, which as we also reported, was old news, according to which Kuroda is now considering conducting a reverse Operation Twist, where it forces a selloff in the long end, while push short-ends even more into record negative territory courtesy of another rate cut.
As we explained last week, it won’t work (read here for the details). But what attracted our attention was the quote by a BOJ official, which once again demonstrates the farce that passes for “clear, lucid” central banker thought in the “new normal” (from Nikkei):
Any decision to take rates deeper below zero will require careful consideration of the yen’s exchange rate and the state of the broader economy. And debate will likely proceed cautiously. “It’s not as though we can keep lowering rates forever,” a BOJ official said.
And why not?
Actually, we take that back: this is not a farce, this may well be the cold, hard truth, because we have now reached a point where even a BOJ member is wondering out loud just how far the idiocy of his central banking peers can reach, and if it even has an actual limit. Sadly, for the BOJ – and the global market -Â we are now virtually certain that the answer to the question we posed last week, namely whether “read here for the details”, is a resounding yes.
