Quick notes after BOJ head Kuroda’s meeting with the other powers that be, Parliament and PM Abe. (Keep note that Q4 GDP will be reported next week, Monday, and I read there’s a G20 meeting at the end of the month where there might be more discussion of currency rates. Next Monday, SSEC opens up too, after a week-long New Year’s holiday, just in time to catch up with this past week’s insanity.)
In summary, let the JAW-BONING and OPTICS management commence.
Bank of Japan Governor Haruhiko Kuroda said on Friday he discussed global economic and market developments in a meeting with Prime Minister Shinzo Abe.
“There was no particular comment from the prime minister,” Kuroda told reporters, when asked what they discussed on monetary policy.
NOTHING like photo-ops and “no comments”.
And then Kuroda jaw-boned also at Parliament:
“I don’t think the BOJ’s negative rate policy is behind (the recent market turbulence),” Kuroda told parliament on Friday (Feb 12).
“Excessive risk aversion is spreading among global investors,” he said, adding that he will carefully watch how recent market moves could affect Japan’s economy and prices.
“Since adopting quantitative and qualitative easing, I have consistently said the BOJ will take whatever steps necessary, including additional monetary easing, if needed to hit our price target,” Kuroda said.
That 2 percent inflation “target” feels a bit out of reach for even a Godzilla-sized bazooka.
And Japan’s M.O.F. is a part of this too. From Finance Minister Taro Aso:
“Recent foreign exchange moves have been very rough. I am very nervously watching these moves and will take appropriate steps as necessary”
“We will monitor the developments in the currency market carefully and will respond appropriately when necessary”
From the Wall Street Journal:
“A close adviser to Prime Minister Shinzo Abe said Friday that the Bank of Japan may call an emergency meeting to undertake additional monetary easing if financial markets remain turbulent.”
Meantime, I’m reading that the moneyed are being advised to go long more Yen:
Credit Suisse is advising its private-banking clients to buy the yen against the euro or South Korean won because the Japanese currency remains undervalued versus the US dollar.
Stamford Management Pte, which oversees US$250 million for Asia’s rich, told clients the yen is set to strengthen to 110 against the dollar as soon as the end of this month. Singapore-based Stephen Diggle, who runs Vulpes Investment Management, plans to add to assets in Japan where the family office already owns hotels and part of a nightclub in a ski resort.
Let’s see how Q1 2016 plays out. I suspect sore jaws and some rich might get even richer as Yen bulls.
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Japan has certainly take the attention off of China this week! Can’t wait until their markets re-open post Spring Festival holidays. My fav new central bank term is “rough”.
Yes indeed 🙂