top of page
  • Writer's pictureEdward Ballsdon

BoJ still in a Straitjacket

RESEARCH CONTENT


This report discusses the market speculation about when the BoJ would tighten policy and take rates positive. It notes that there has not been much volatility in JGBs or $Yen – they have  been correlated to USTs and the USD Index respectively. The money market strip has traded in a pretty tight range and the market currently prices 30p of rate hikes by Dec24


Despite all the ongoing speculation, this brief report highlights that there are two important headwinds for the BOJ to tighten policy:


1)      Non-cyclical continued poor Debt Dynamics

2)      A deteriorating economy


The report, that builds on previous research on Japanese debt dynamics, shows how the BoJ is in a tough spot and their window to change policy is likely to be shut. This leads to the possibility of trends restarting in financial markets that should offer interesting opportunities.

66 views0 comments

Recent Posts

See All

Update on France

An update to the 12Dec23 research on France which concluded that French OATs were at risk of a revaluation: https://www.thegreyfirehorse.com/post/french-flying-red-flags In this research, there are up

US Inflation

Whilst the lower than headline print was very welcome, this research demonstrates the significant bifurcation of inflation rates of the various components in the CPI basket.

The Yield Curve and "This time is different"

This research analyses the ability of the yield curve to forewarn a recession. In conclusion, this time IS and IS NOT different: It’s not the yield curve that predicts recessions, it’s the rise in bot

Comments


bottom of page