Bank Of Japan Takes A Major Gamble With Yield Curve Control
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- Опубликовано: 14 окт 2024
- At the July 2023 Monetary Policy Meeting, the Bank of Japan took markets by surprise (after "pre-announcing" its policy 10 hours prior during US trading hours and moving global currency, equity and bond markets) by making a significant change to its Yield Curve Control policy framework, in which it lifts the upper trading band on 10-year JGB yields from 0.50% to 1%. The central bank also made a major revision upwards on its inflation forecasts for fiscal year 2023 to 2.5%, well above its 2% target. This is the first policy change implemented under newly appointed Governor Ueda.
While the consensus debate revolves around whether or not this is the start of Bank of Japan's exit from its outlier accommodative policies, Tokyo-based Weston Nakamura believes that there is far more to the policy decision than just a "YCC tweak."
Aided by utilizing financial media outlets to move markets and clear out existing positions, the Bank of Japan is attempting to wrestle its policy away from the hands of markets, and return it back under its own control by purposely introducing elements of confusion and uncertainty - which it labels as "flexibility."
Weston gives a historic overview of how Yield Curve Control trading bands had been a market-creation in the first place, what the market implications are, and why this policy change fundamentally reshapes how the Bank of Japan and market participants interact.
Watch:
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Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
I actually like these long videos, this is exactly what sets you appart in a very good way.
Hey Weston, I used to think that you were really bad at explaining things but after you started Market Depth you've really come into your own, everything is so coherent and easy to follow that I can barely believe that this is a free access thing. Keep up the tremendous work.
I’m a Weston ‚convert‘ in a similar turn as you! Weston has a seemingly somewhat ‚muddled‘ way explaining macro-economic contexts, but if one overcomes this first impression, it turns out, he rather let you participate at him solving a puzzle - meticulously and gradually.
Finally patience is rewarded
Woot up late as hell tonight and been jonsing for some Asian market news! Lets get it!
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly-which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $125k bond/stocck portfolio
The market is volatile at this time, hence i will suggest you get yourself a financial-advisor that can provide you with entry and exit points on the shares/ETF you focus on.
very true, I started investing before the pandemic and that same year I pulled a profit of about $600k with no prior investing experience, basically all I was doing was seeking guidance from a financial-advisorr, you can be passively involved with the aid of a professional.
wow ,that’s stirring! Do you mind connecting me to your advisor please. I desperately need one to diversified my portfolio.
Gretchen Marie Hostetter
That's my licensed Financial advisor you can easily look her up, Thank me later!
Thanks, I merely looked her up on Google and was highly impressed by her credentials; I got in touch with her because I need all the help I can get. I just set up a phone call.
Smaller, speculative stocks have endured a historically weak stretch. Investors are betting that a turnaround is finally in the works. I’ve lost about $320k within a few months, how do i take advantage of the market turnaround?
the mkt has gone berserk! whether you're a newbie or a veteran investor, everyone needs a sort of coach at some point to thrive forward
Well agreed, that's the more reason I prefer my day to day mkt decisions being guided by a invt-coach, seeing that their entire skillset is built around going long and short term, at the same time laying off risk as a hedge against inevitable downturns
please who is the expert assisting you and how do I reach out to them?
kathryn Alethe Hall is my portfolio coach, and my trading account basically mirrors that of hers, it's quite transparent and automated, so I don't have to be active during trades. You can vet her if you like.
Thank you for sharing; I just Googled her name and her website came up right away. It looks interesting so far
“There is no risk free yield in Japan, there’s only yield free risk” - Weston Nakamura
😂😂😂❤❤❤
✅️✅️😂
I suggest putting no time limit with 30 minute hard cap for these podcasts ;)
Tell me one person here who wasn't waiting for this video..
Waited? Begged 3 1/2 days ago!!! Get me the damn Weston Nakamura!!!
I wasn’t thoroughly confused before, but now I am 😅😂
Im so glad Blockworks has Weston to analyize Asian markets in these uncertain times. We appreciate you Weston......good job 👍
You nailed it. Thats exactly what I thought when the press release came out. I am a fan.
I knew a tweak was coming when Lagarde turned Dovish n profited from it. Because I had watched your program. Thanks for your predictions.
Basically BoJ is now saying to the markets:
We will buy everything at 1%
Between .5 and 1% we may buy everything or we may not. Play at your own risk.
I think this will buy BoJ more time until they are forced to raise the band again.
Thank you Weston! Your keen grasp of the arcane inner workings of the BOJ and central banks in general is laudable.
Starting watching regularly about month and 1/2 , I greatly appreciate your work. Thank you.
Yet another top shelf video. Yield free risk- best line ever. YCCC The best by far.
Not sure what is so confusing here:
• their target is still zero
• they’ll do nothing below 50 bps
• they may do something between 50 and 100 bps
• hard stop is at 100 bps
B/c the target rate is still 0, this measure seems to have nothing to do with inflation in Japan, but rather may help repatriate some of those trillions that Japanese investors hold abroad. If domestic financial institutions can get 1% home, that may just be enough to offset the interest differential minus hedging costs. In effect, BOJ is helping the FED and ECB to tighten…
The Japanese anticipate being able to sell jgb's during the unwinding of yen carry?
Well said.
What BOJ did reminds me of sitting in meetings for an hour. Absolutely nothing.
Beautiful and well explained. In addition, the US stock and real estate market is something everybody should exploit. There's a lot of potential and I am seriously considering going into one of them. I have been confused on the better option and where and how to go about this. It's becoming too much of an opportunity to pass on.
Why not both? You should always remember to diversify your investments given the state of the US economy. Avoid putting all of your eggs in one basket. I have worked in real estate for as long as I can remember, and late last year, using only stocks, I earned my first million dollars (I hired a professional because I also don't live in the United States). In addition, I try out a few other things. It's hard to believe that I first resisted exploring new options.
@@kelbenjamin Your insights are practical and accurate. I've also been involved in both for a while, and while I haven't lost a fortune, I've squandered a significant amount. You mentioned using pros, so if it's not too much trouble, could you share who you used or recommend a good one? I could really use some help right now. Looking forward to your reply.
@@ragabkamel_ Absolutely! I sought the help of a pro due to my limited expertise and time constraints. Though I can't give all the details, my advisor is Eric T Witt, and you can find more about him through a quick Google search. 😄
@@kelbenjamin thanks for this info, curiously copied and pasted his full name(found out that the T in his name is Thomas btw) on my browser, found his site and skimmed through the credentials, no sweat .. over 10+ years of undisputed experience is quite striking
Hello, I’m watching you from Ukraine, thank you for the interesting and informative video and I’ll be glad to see new broadcasts
and thats why you're the former bank of japan deputy! beautiful, love it. speak truth to power always. nicely done Weston. keep the great stuff coming. many thx
Ueda is undeniably a charismatic figure. Rather than labeling him a prostitute, he's more like a Chippendale - full of charm, smarts and obvious sex appeal. He masterfully regained command over YCC--way beyond what Kuroda could do. Ueda has got global markets by the balls!
😂
He's the Brad Pitt of central bankers. 😂
Can you please enable subtitles for us hearing impaired?
Yo lo veo subtitulado Amigo... soy de Argentina! Solo tardan unas horas despues de que se publique el video.. En la ruedita traduccion automatica..
Incredible explanation of 'Why we should be concerned..."!!
Came for the market analysis, stayed for the colorful turns of phrase 👍🏼
Great observations as always Westie. One suggestion. Time stamps will accelerate your viewship.
“There is only yield-free risk in Japan” 🤣 put that on a tshirt
Great show. I hope you are having as much fun as I am. Is the BOJ in on the joke? Needless to say, I don't have money invested anywhere.
Where is best recommended Ticker/Chart site to follow JGB yield? ie, the JGB equivalent of ^TNX?...
How about what is up with 2/10 spread on JGBs? Any material signal from this to be taken?
YCCC spot on Weston. JP 10yr is already printing 60bps, hitting 100 lets the boj back up the truck with even more firepower, I could be wrong but I expect some reflexivity here at some point.
I wonder if Warren Buffet is dumping Japanese stocks after this news. 😂
What do you expect will happen to Yen if and when 10 year JGB approaches 100bps?
Are going to sell UST? Asking for a friend
very thorough analysis and the comment about how the governors of the central banks react is very insi
Thanks Weston
love it. "after i discuss what has happened last week, you will be more confused than originally thought. if so, i did my job"
Thanks for your work
Shit’s getting real.
What's the difference between what. China and Japan are doing? Carry trades assume risk.
You should make a content on how to earn 6 figures in monthly profits cos I've been reading about investors making up as much and I'd really love to know how to such substantial profit in this current market
I recommend to pick up and read a few books. Peter Lynch is where I was recommended to start. Learn different strategies so that you might develop your own.
Even with the right technique and assets some investors would still make more than others, as an investor, you should’ve known that by now, nothing beats experience and that’s final, personally I had to reach out to a market analyst for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I’m buying again
time in the market and your contributions are far more important.. also diversify the hell out of your portfolio (at least 5-7 different asset classes)
@@WealthCastillo who is your financial coach, do you mind hooking me up?.
@@WebbXavier284 there are actually no particular sectors i focus on. I was just fortunate enough to have the guidance of a successful and highly knowledgeable wealth advisor *ANGELA SHAN HELMS* . That was a smart move since my portfolio has grown at a tremendous pace.. my account just mirrors what she trades and not just on some particular industries of my choosing
remember the previous JPB raise rate? Before that happen, Yen was going down because US raise rate to cause more borrower to take advantage of cheap YEN? If that is really true, that make sense that JPB raise rate again follow by US raise rate again few day ago. The invisible formulate to borrow for profit margin is only .25% to make a win or lose. Just my 2 cent.
Wat about borrowing 10 year yen lending it to us government for 10 years. What are your risks?
It will work perfectly YCCCC Flex ...Another great show
I was pointing out the Japanese bond volatility for days...
I'm confused. I love it. LOL
%The truth is they lost control and they do not know what they are doing now.
I'm visiting Japan out in a "rural" prefecture and I'm surprised Japanese people (especially young workers) haven't started open rebellion.
As a Canadian, the yen is the cheapest I've ever seen it and prices are like Canada over 10yrs ago.
My spouse (Japanese expat) was also laughing how with the exchange rate, she makes more money in Canada than the average Japanese salary man.
I personally think Japan needs to try and inflate salaries if they want keep a working society going forward.
With unemployment so low in Japan (as I has been since 2009) and all the retirees, it is a puzzle as to why salaries don't increase.
The minimum wage is way too low. Not enough workers in the service industry and they get paid min wage, no tips and they are run off their feet. They are difficult to replace.
Workers are not demanding higher wages. Even unionized companies don't strike. They don't "demand".
Feminism has an advantage too in that women back home demand equal pay for equal value. Jobs like nurses and teachers, jobs dominated by women get paid nothing in Japan.
Anyways. I completely agree with you. Japan wants to create inflation? Start by raising wages. A min. wage of 1500 yen would be a good start.
they have to attack china their forign policy has changed now from pacifisim
I thought it was supposed to be about the journey, not the destination, Ms. Lagarde.
5:56 "Bank of Japan policy shifts itself". Minus 1 letter.
insightful
When Japan is in the news, it's best to go to the experts like Weston.
I have watched a few of your videos and would definitely like to be a regular watcher BUT I simply do not have 1+ hour to watch a video. Markets are active, it’s earning season, there is a lot of data to absorb, and no single video can take up over an hour of the day. I encourage you to edit down to 15 minute videos - maybe as a Cliffs Notes adjunct to your full 1h 20m video.
Definitely overlooked,undervalued stream.. this is great insight into a very volatile markets!! ❤️
Until now the Japanese bond market is one of the most non-volatile markets of all. But there is the potential that it could become the one market that will cause massive volatility of all major bond and also currency markets
People talk abou BoJ using unlimited buying to peg 10y yields between +/-0.5 (or +/-1% now), but I just assume they mean buying or selling. You can't raise rates from -0.5% without selling unlimited bonds at that level. Of course that can't quite be unlimited, but I suppose over the last 10 years they have accumulated quite a wall. Or am I just confused and there's someway weird way to buy more bonds to push rates up?
The trick would be the underlying assets that will power up JGB / Yen . Gold as example appreciated higher in Yen than in USD.
Great video man! Thanks for confusing me 🙂
Couldn’t this be more concise?
Finally !
You’re speeding up your speech again. Please slow down.
Hey, why aren’t you posting videos?
way better than RV.
'Strategic ambiguity'
The power of the yen is indisputable. 😅
You need to get confused...haha 😂
👍👍
Dude, just bullet point it. You take 30 minutes to explain what could only take 1 paragraph. You are killing me
I think "no upper limit" is on quantity, not yield
But who knows
you rreally need to make your videos LOUDER !! thx
In a round about way if they fail to sufficiently monetize debt inflation becomes the only escape
I remember your videos last year when you said if BOJ did this markets would absolutely crash. Not sure what the point of all your videos are
I feel shonked
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I'm really lost right now, can you tell me how to find him?
@@Alexander_Tolmatskiy "Dan Price CFA" will show him on Google and you can see his resume.
@@07gang80 I never thought I would meet my advisor 'Dan Price CFA' here, he is a very authoritative and awesome person.
Japan minimum wage increase is coming this OCT. Something to do with inflation.
lol it's not contradictory but this has a cleverly ironic title. Gambling on yield controls? You're taking more of the "gambling" out of the market.
It raises the question though: at what level of government support for capitalist enterprises do you have to reach for it to no longer be a free market.
Bruh, Westin is so freaking whiny. Just deal with the BOJs policy if you are actually a good market participant and talk about the facts.
I bet on Nippon
It's hard to say that this meeting was anything but a success for ueda and the boj
reference refers to initial state of the rate ... this means the want the median to be 0 the upper limit 0.5 and they will intervene hard only if rate goes close to 1%, but they will start playing in the market if rate goes close to 0.5... this give them higher flexibility in intervining, and should scare speculators, since the intervininig in market can come at 0.5 or at 1 or between whenever they want..... please sponsor me 1k to ket out of the market!
Very interesting but make it shorter
why is this so long? it could be 15 mins long. be more concise please
All signs point to 2023 being a year of significant economic hardship for the entire nation. Put your cash to use straight away to increase its value. I was aware that I needed to invest. I had no idea how quickly a few thousand dollars a month would go up. Though it is. Since 2020, I've made about $600,000.
@EthanMichael740 If you don't want to crash and burn, you should seek the advice of a fiduciary counselor when you first start out. Because their entire skill set is based on going long and short at the same time, they employ a profit-driven strategy based on individual risk tolerance.
こんにちは！
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I am a newbie, how can I contact him?
I can come and tell you that I share a counselor with him. I will put his info below this comment. You can look up his name and you will know everything about him.
“Dan Price CFA”
Man this is too long… 2hours are you serious
I like ur videos. ❤
But pls, can u simplify & summarize ur videos into 10 minutes or less. 🥺
Your using the wrong platform - go on tiktok.
The rest of us like the granularity on obscure Japanese monetary policies
@@grooves.x It's unnecessarily repetitive, and the delivery is disjointed. He's a campfire storyteller. en.wikipedia.org/wiki/Shaggy_dog_story
@@tbayley6 Every ret__rd has to have at least an one hr video nowadays, and the idiots watching the entire video while still being clueless.
JAPANESE OBSCURANTISM
Bank of Japan bank of markets is a fraudulent bank their is one digital market that's is cryptocurrency market owned by Miguel angel Mejia that's a fact and I hold my cryptocurrency in no bank
Finally!