Tonight’s announcement of a 25 bps increase to around 75 bps for the Bank of Japan might sound “hawkish” for the Yen, but when one parses the statement, it sounds more like a lonely sheep itching for the goat herder to give them some loving.
From the first page of the Change in Guideline from Money Market Operation via the BoJ:
Seems bullish for the Yen, right? Let’s go to page 2:
Uh, let us review one sentence from section 3 one more time:
The Bank of Japan actually believes that President Instability has introduced a decline in uncertainty?
Even Chappelle wants some of what these clowns are smoking, and the reaction to confirm that statement is coming up at the end of this.
On to page 3:
So in section 2 they claim that there’s an introduction of stability in US policy but in the outlook and review of the economy above in section 1, they admit there is some degree of impact due to the tariffs.
Very Jay Powell type of doublespeak there.
And now in conclusion the risks are that maybe, just maybe, trade policy isn’t so stable and the US is not a trusted trade partner when one reads between the lines.
Currency traders did read between the lines and now besides the Canuckistan Peso, I introduce to my readers the Tokyo Lira:
The Japanese Yen carry trade will not die by accident; it will die due to arrogance and incompetence.
Buckle up because believe it or not boys and girls, there are kamikaze bond vigilantes in Japan also. And now might just be the ideal time to launch an all out raid to expose the incompetence of the Bank of Japan and current government.
