Japan Unveils Extensively Priced In 'Unlimited' Monetization News
January 21, 2013 - 10:50pm
In the most anticipated (and likely most strawman/leaked) policy actions, the BoJ and the Japanese government (still independent entities theoretically) have unveiled the new monetary policy to complement the $116bn fiscal stimulus plan to boost growth: *BOJ TO ADOPT 2% INFLATION TARGET *BOJ WILL INTRODUCE OPEN-ENDED PURCHASING FROM JAN 2014 *BOJ TO BUY 2T YEN OF JGBS MONTHLY FROM JAN 2014 *BOJ TO BUY ABOUT 10T YEN OF T-BILLS MONTHLY FROM JAN 2014 With epic amounts of JPY shorts and NKY longs, JPY was notably bid versus the USD (from Friday's close) going in, 30Y JGBs bid relative to 10s, and the NKY and TOPIX were leaking lower. Now is the time to see just how effective this efficient market is at pricing in the stabilization-to-retaliation phase of the current actions. Though of course, there is no intent to cough-'weaken'-cough the JPY: *AMARI TO SAY AT DAVOS NO POLITICAL INTENTION...
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