The Bank of Japan Pivots, Now Aiming to Control the Shape of the Yield Curve

What exactly does that mean? The BOJ will scrap the idea that lower rates can spur growth and instead focus on the explicit profitability of their banks, by rigging the actual shape of the yield curve.

Crazy Kuroda, BOJ Chief, announced the board would keep rates at -0.1%, but the $780b stimulus that was designed to control the bond markets would be tweaked in an effort to create a spread between short and long duration credits. This is QE, the newest version.

“The BOJ’s decision to steepen the yield curve showed they are taking into account the situation of financial institutions,” said Takeshi Minami, chief economist at Norinchukin Research Institute. Atsushi Takeda, an economist at Itochu Corp. in Tokyo, said today’s decisions “suggest that the BOJ is reaching its limit to monetary options.”

This is the end of the road for the BOJ. If this doesn’t work, nothing will.

I’d like you to entertain curmudgeon Fly and, if only for a moment, think about the financial tyranny the BOJ is unleashing on their people for the benefit of a select few corporate entities. Free markets are dead. We’re living in an era of command oligarchies that will be remembered as the nascency of a financial dark age.