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The BOJ is buying assets at 75% of the Fed's level in a Japanese economy only one-third the size...

The BOJ is buying assets at 75% of the Fed's level in a Japanese economy only one-third the size of the U.S., says Kyle Bass, putting last night's new policy in perspective. Japan is trying to materially devalue its currency (FXY) while holding rates flat. The "economists and central bankers believe they can live in that nirvana," says Bass, but he believes they will lose control. JGBs (JGBT, JGBL, JGBD, JGBS) are in nirvana today, the 10-year off 11 bps to 0.45%.
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Comments (3)
  • Glen Bradford
    , contributor
    Comments (568) | Send Message
     
    It's unfortunate that Kyle Bass doesn't understand the difference between a currency issuer and a currency user.
    4 Apr 2013, 01:25 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    The Japanese want their carry trades back.
    4 Apr 2013, 01:35 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    This move by the BoJ was not surprising. They will continue the actual and rhetorical pumping until USDJPY reaches 100 or above. Look at the history of JPY price action vs. other currencies and commodities. In 2000-2, the JPY was 25-30% lower than in is today.
    4 Apr 2013, 01:30 PM Reply Like
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