UPDATE: *NIKKEI 225 EXTENDS ADVANCE TO 5%
NKY is up 1000 points from FOMC
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and what do u expect to happen to JGBs when Stocks rip 1000 points… yep they’re rallying!
- Yield on 10-yr govt bond declines 3.5 bps to 0.435%, while 20-yr yield also slides 3.5bps to 1.285%, both lowest since April 2013.
- 5-yr yield falls 1 bp to 0.110%, level unseen since March 2013
- Lead 10-yr bond futures climb to record 146.78
In a surprise move given all the recent congratulatory bullshit from Abe and Kuroda on breaking the back of Japan’s deflation and bring about recovery (forgetting to mention record high misery index, surging bankruptcies and a crushed consumer), the Bank of Japan (by a 5-4 vote) raised its bond-buying program from JPY 70 trillion to 80 trillion… and triple its ETF buying to JPY 3 trillion. This move, on the heels of more confirmation of broader foreign asset purchases in Japan’s GPIF sent USDJPY instantly gapping 1 big figure higher to 110.30 and Nikkei futures instantly rose 400 points. S&P futures are also surging. Gold and silver are tanking and TSY bonds are selling off.
- *BOJ UNEXPECTEDLY TARGETS BIGGER EXPANSION OF MONETARY BASE
- *BOJ TARGETS 80T YEN ANNUAL EXPANSION IN MONETARY BASE
- *BOJ SEES RISKS IN CHANGING DEFLATIONARY MINDSET
- *BOJ AIMS FOR ANNUAL INCREASE OF 80T YEN IN JGB HOLDINGS
- *BOJ EXPANDS PURCHASES OF ETFS TO 3T YEN
- *BOJ: ETFS TRACKING JPX-NIKKEI INDEX 400 ELIGIBLE FOR PURCHASE
- *BOJ: WILL CHECK RISKS, ADJUST POLICY AS APPROPRIATE
BoJ Statement
This was a double whammy though as Japan also announced it was shifting GPIF asset allocations…
From this…
To this…
- GPIF’s current portfolio targets are 60% for Japanese bonds, 12% each for local and overseas stocks, 11% for foreign bonds, 5% for short-term assets
- GPIF will today boost allocation targets for Japanese and foreign stocks to 25% each, while reducing its domestic debt allocation to 35%
