Unchanged!
That was the monetary indecision by the Bank of Japan early this morning and the Dow Futures(/YM) are down 130 points from their high (now 17,183) and the S&P Futures (/ES) are down 15 points (1,999) with the Nasdaq (/NQ) down 26 points (4,344), Russell (/TF) 1,070 and the Nikkei (/NKD) is at 16,935. Essentially, we’re still at the same lines we’ve been looking to short since last week (see yesterday’s post for levels), but no clear signal yet.
The BOJ stood pat despite the trouble facing Abenomics, Prime Minister, Shinzo Abe’s growth program. Conditions have improved little—some have worsened—since the BOJ decided in late January to impose negative rates, an unorthodox step seen as a desperate attempt to ignite growth – one which has since been followed by the ECB. BOJ Governor, Haruhiko Kuroda, said during a news conference that the negative rate policy was lowering borrowing costs but the central bank needed more time to measure its effects, particularly on the real economy.
In its policy statement, the BOJ said Japan’s economy still faces risks from overseas, including the “European debt problem” and “developments in the U.S. economy and the influences of its monetary policy response to them on the global financial markets” which is funny because the US and Europe are worried about the risks coming from Japan’s non-stop money-printing, massive debt and stagnant economy.
Overall, rates in Japan are a bargain compared to Europe at -0.1%, you get to keep 99% of your money if you leave it in Japan for 10 years – in Europe, it can be as low as 95% so start planning your retirement now!
There’s nothing unexpected in this move, or non-move as yesterday we talked about their INCREDIBLE (as in NOT credible) Industrial Production Numbers that only could have meant that the BOJ needed some “good” news to lean on when explaining why they were not lowering rates. Keep in mind Abe’s fate is up for grabs this summer as he faces a no confidence vote so expect him to do ANYTHING to prop up the numbers.
