RetireJapan

https://www.reuters.com/markets/asia/bo ... 024-07-24/

I strongly believe a small rate hike WILL happen this year, but that is as certain as I am timing wise. I think September is possible, but July is more likely.

There are so many moving parts, but it seems the BOJ fears the losing the positive momentum they are seeing in the yen.

The simplified version is: BOJ rate hike now (.1%?), Fed raises in July/September, the positive momentum is preserved and the carry trade dies down.

Then Japanese consumers feel some price relief.

{I have not taken a position, still unhedged global equities}

Fed isn't going to be hiking, they'll be cutting next.

Deep Blue wrote: ↑Thu Jul 25, 2024 1:38 am Fed isn't going to be hiking, they'll be cutting next.

Thank you for the correction, I cannot edit away my shameful error anymore it seems.

Tsumitate Wrestler wrote: ↑Thu Jul 25, 2024 2:04 am

Deep Blue wrote: ↑Thu Jul 25, 2024 1:38 am Fed isn't going to be hiking, they'll be cutting next.

Thank you for the correction, I cannot edit away my shameful error anymore it seems.

Sorry about that, we were forced to restrict editing to the first few minutes because the newest bot/spammer tactic is to go back and edit very old posts to include dodgy links etc.

RetireJapan wrote: ↑Thu Jul 25, 2024 4:40 am Sorry about that, we were forced to restrict editing to the first few minutes because the newest bot/spammer tactic is to go back and edit very old posts to include dodgy links etc.

Is it easy to change the limit to an hour? I think a few minutes is a bit restrictive. Sorry I didn't express my opinion at the time.

Regarding the thread topic, if the BOJ doesn't raise rates next week then the yen might suddenly weaken again. The exchange rates are hard to predict, but what about volatility? Is there a good way to bet on volatility in the currency markets? (for US stocks you can use the VIX)

northSaver wrote: ↑Thu Jul 25, 2024 6:30 am

RetireJapan wrote: ↑Thu Jul 25, 2024 4:40 am Sorry about that, we were forced to restrict editing to the first few minutes because the newest bot/spammer tactic is to go back and edit very old posts to include dodgy links etc.

Is it easy to change the limit to an hour? I think a few minutes is a bit restrictive. Sorry I didn't express my opinion at the time.

Regarding the thread topic, if the BOJ doesn't raise rates next week then the yen might suddenly weaken again. The exchange rates are hard to predict, but what about volatility? Is there a good way to bet on volatility in the currency markets? (for US stocks you can use the VIX)

It's 30 minutes now

I just bought some plane tickets 2 weeks ago when it was 161 JPY

Good article, thanks.

The rate hike gets a lot of attention, but in the BOJ’s case they are still doing QE, and how much and how fast they wind that back is of most interest to me.

Even if they hiked their policy rate to 1%, which would seem high for Japan, I imagine the other major currencies will still by and large have policy rates above that, to some kind of extent.

And it sounds very much like some degree of QE is set to continue for at least a couple more years, at best.

To me, the BOJ is going to end up being seen, as always, as being far too slow to make its policy changes. In a way I don’t blame it, as I’m not convinced that the whole idea of a lack of inflation was the source of Japan’s economic problems to begin with.

BoJ will announce how quickly QT will be accelerated next week. Bond buying will fall further below the pace of how quickly the JGBs on their balance sheet mature and hence their holdings will shrink - de facto tightening.

What on earth give you the impression we have years more QE ahead?

By some metrics we’ve already started QT, even before Ueda-san announces the further cut next week.

https://www.bloomberg.com/news/articles ... tightening

We’ll see what their plan says.

My guess is they’ll be much slower than the FOMC in this, making them look like a sumo wrestler “on a diet” losing a few grams a week, but still remaining relatively bloated for a long time (and then future events will spoil their plans anyway).

But yes you’re right I suppose it might be able to be called QT. For the sake of my yen I hope they go hard myself.