9 replies to this topic

[jmicou]

Cause the BOJ did nothing.

[jmicou]

Bank of Japan holds monetary policy steady and the yen's on a tear http://www.cnbc.com/id/103586189
http://www.cnbc.com/id/103586189

[Geomean]

I keep a spread sheet of key parts of the BOJ  Balance Sheet and Income Statement.  It uses mark to market accounting.  It holds 765 tons of gold, which is also marked to market on it's balance sheet. It's gold holdings just about equal it's net asset value.  It's leverage ratio is 130/1

 

This Nikkei move cut about 7.7% ( about 2.6 Billion USD) from the Bank's net asset value in an hour (formerly @ 34 Billion USD leveraged to control @

 $  3,685,950,521,622  USD in assets.

 It currently owns roughly 80 Billion USD in equities.  A normal stock decline will wipe out it's capital and reserves. 

 

An increase in interest rates would also wipe it out.

 

It's buying 2 billion in equity ETF's a month in a market that had $1.3 Trillion in turnover in 2013. 

 

The economic literature on Central Bank insolvency has been the subject of a lot of papers lately. They generally note that while conventional bankruptcy filings don't exist, policy and market constraints do.  We are seeing evidence of that this am. 

Edited by Geomean, 28 April 2016 - 12:45 AM.

[K Wave]

Yep, looks like we gonna gap those key pivot zones on US DOW/SPX tomorrow, and inverse ETFs should light up the Saturn Vs...  was just a matter of time.....

[dasein]

Thanks Geo - interesting info to say the least.

[jmicou]

I keep a spread sheet of key parts of the BOJ  Balance Sheet and Income Statement.  It uses mark to market accounting.  It holds 765 tons of gold, which is also marked to market on it's balance sheet. It's gold holdings just about equal it's net asset value.  It's leverage ratio is 130/1
 
This Nikkei move cut about 7.7% ( about 2.6 Billion USD) from the Bank's net asset value in an hour (formerly @ 34 Billion USD leveraged to control @
 $  3,685,950,521,622  USD in assets.
 It currently owns roughly 80 Billion USD in equities.  A normal stock decline will wipe out it's capital and reserves. 
 
An increase in interest rates would also wipe it out.
 
It's buying 2 billion in equity ETF's a month in a market that had $1.3 Trillion in turnover in 2013. 
 
The economic literature on Central Bank insolvency has been the subject of a lot of papers lately. They generally note that while conventional bankruptcy filings don't exist, policy and market constraints do.  We are seeing evidence of that this am. 

Interesting.

Is there an object lesson here?

[jmicou]

USD/JPY has a primary 1.618 at the 108 level and quickly fell back to that low overnight. If YEN blows on though, will, or can, the BOJ unilaterally intervene. Does unilateral currency intervention work fully?

[jmicou]

http://www.cnbc.com/...ard-fisher.html

Just a thought by Ricard Fisher.

Edited by jmicou, 28 April 2016 - 07:35 AM.

[jmicou]

USD/JPY broke, so support in the 104/105 area, but the 101/103 looks doable. However, at what point does the BOJ step in?

[jmicou]

US FX monitoring:

http://news.forexliv...-on-fx-20160501