Hello Weston! Just became a paying member, you deserve every penny. One question if I may: can we track the nisa flows to us equities? If so, how's it looking?
Yep - zero & hold. “Live at zero” is my new expression
Live at 0%, and the “policy rate fluctuation” thereafter will be jawboned “rate adjustments” - but will be holding at zero - or (and this is what I’m currently writing about) - need to think about this not as “hiking rates” (i.e. going to a destination), but rather, what/how much they’re reluctant to EXIT current stance. And (once there), EXITING zero (not “hiking rates to positive”) will in my view be met with far more reluctance than exiting negative
Thanks for the insight and info. I was definitely starting to believe the rumor of nuking negative rates out of the March meeting. But didn’t Ueda once mention a need for wage hikes for BOJ to take a next step?
First of all just my personal rhetoric- but I take for face value what Ueda says as much as I do Kuroda, far less actually, and you’ll see why.
But yes you’re right, in fact depending on what you mean by “mention” - he’s expressed many iterations with varying degrees of this, and across the spectrum. Including to your point- even if we see strong wage hikes in spring ‘24, we’d still need (or prefer) to see evidence of long sustained trend of wage inflation.. But again that was ages ago in terms of boj policy desires (like a few weeks/months back). I think the latest from Ueda on the matter (and mind you this can change as I write this) is actually something along the lines of - we can still move on neg rates even under (then-less known, pre-spring-negotiations) current wage shift (i.e. less empirical based).
And he also wildly fluctuates on the weighting of importance and influence that wage trends have on neg rate exit policy decision.
All of this playing-all-sides “flip-flopping” is not incompetence, it’s covering all grounds to do whatever (hike, hold) - as he can always point to “well what we did/didn’t do is in line with what I did previously mention… “ - so with that tactic, the more variety of contradictory stances he’s put on the record, the better for that strategy execution of max optionality.
And so this is why I say I don’t take what Ueda says at face value at for a given moment.
This is going to be a truly historic meeting. I think the BOJ are ready to exit their era of negative rates. Usd/Jpy is bid today because of the meltdown in us fixed income but still the Yen can appreciate from here once we physically see BOJ exit negative rates.
Hello Weston! Just became a paying member, you deserve every penny. One question if I may: can we track the nisa flows to us equities? If so, how's it looking?
Thank you for your support! Here’s your answer lol👇
https://open.substack.com/chat/posts/b13286cb-bb53-4484-9f17-542e234857d7?r=8c43a&utm_medium=ios&utm_source=share
You animal 💪🏾🔥
So, what’s your bet, like you suggested before not negative doesn’t mean positive. Will it be zero? Hmm, interesting times.
And almost the same timing as @agnostoxxx’s (A)Ides of March scenario on the 18th in the US.
Yep - zero & hold. “Live at zero” is my new expression
Live at 0%, and the “policy rate fluctuation” thereafter will be jawboned “rate adjustments” - but will be holding at zero - or (and this is what I’m currently writing about) - need to think about this not as “hiking rates” (i.e. going to a destination), but rather, what/how much they’re reluctant to EXIT current stance. And (once there), EXITING zero (not “hiking rates to positive”) will in my view be met with far more reluctance than exiting negative
Thanks for the insight and info. I was definitely starting to believe the rumor of nuking negative rates out of the March meeting. But didn’t Ueda once mention a need for wage hikes for BOJ to take a next step?
First of all just my personal rhetoric- but I take for face value what Ueda says as much as I do Kuroda, far less actually, and you’ll see why.
But yes you’re right, in fact depending on what you mean by “mention” - he’s expressed many iterations with varying degrees of this, and across the spectrum. Including to your point- even if we see strong wage hikes in spring ‘24, we’d still need (or prefer) to see evidence of long sustained trend of wage inflation.. But again that was ages ago in terms of boj policy desires (like a few weeks/months back). I think the latest from Ueda on the matter (and mind you this can change as I write this) is actually something along the lines of - we can still move on neg rates even under (then-less known, pre-spring-negotiations) current wage shift (i.e. less empirical based).
And he also wildly fluctuates on the weighting of importance and influence that wage trends have on neg rate exit policy decision.
All of this playing-all-sides “flip-flopping” is not incompetence, it’s covering all grounds to do whatever (hike, hold) - as he can always point to “well what we did/didn’t do is in line with what I did previously mention… “ - so with that tactic, the more variety of contradictory stances he’s put on the record, the better for that strategy execution of max optionality.
And so this is why I say I don’t take what Ueda says at face value at for a given moment.
Thanks. Zeroing in on zero then.
Thanks for the local insight and looking forward to reading your in-depth piece.
Appreciate the “eyeball” back testing…helpful amongst all the noise!
This is going to be a truly historic meeting. I think the BOJ are ready to exit their era of negative rates. Usd/Jpy is bid today because of the meltdown in us fixed income but still the Yen can appreciate from here once we physically see BOJ exit negative rates.