QuantumLogicTrading
Long

LONG USDJPY: ANOTHER BOJ OUTPERFORM CASE - 28TRN GOVT STIMULUS

FX:USDJPY   U.S. Dollar/Japanese Yen
Another argument for the BOJ outperform case - Post BOJ Buy $Yen @MRKT 111tp:

1. We know BOJ and JPY Govt             Abe/ Aso have had many meetings post-brexit and as it follows the JPY Govt             have announced today that they will deliver a fiscal stimulus package of 28trn - which was to the very right of the curve (10-30 was talked about).

- This in mind, imo             it is rational to extrapolate that 1) surely if the JPY govt             are choosing a tail end stimulus package (aggressive), BOJ will be inclined to do also? Given that it is the BOJ remit for economic targets like inflation , not the governments - BOJ wouldnt want to be seen as dropping the egg would they e.g. govt             does as much as it can but BOJ only midly eases - doesnt make sense? Especially given the relationship between kuroda/ aso/ abe             it would almost be impossible.

- 2) The BOJ will know/ see that the JPY Govt             are taking the "extreme" side of measures, so once again this puts the BOJ under-pressure to do the same as they dont want to be seen as "letting the side down" especially as it is the BOJ who really has the power to change things - the Fiscal package is rather an indicative/ nice gesture of the govts willingness to help - rather than any real hard easing when you consider the Govt             package is likely to be 28trn a year but the BOJ purchases/ injects 80trn A MONTH to its monetary based in JGBs - thats 960trn a year. So 27trn govt             vs 960trn BOJ - is the govt             really making an impact or are they instead signalling their commitment/ putting pressure on the BOJ? I think so.

Under-performance case:

1. Perhaps less meaty, but nonetheless a valid point - Japan, JPY Govt             and BOJ have lived with low inflation/ deflation for the past several decades and no "extreme" action has been taken to resolve it (well not enough to fix the problem anyway) so this pressure on the BOJ we talk about above - is it real? or is it a theoretical pressure that they "Must" hit their targets?

- If history predicts the future then yes, it is a theoretical economic pressure - they haven't hit the target for 20yrs so why would they do measures to hit it now? There's no public pressure, im sure theyre happy consuming at lower prices - unlike with high unemployment.

- Off topic but it would be interesting to see a Japan with high Unemployment - an economic indicator that causes civil unrest (Greece riots) and is a necessity to be solved for the wellbeing of any nation - thus my bets are if unemployment was at 15-20% (similar comparison to deflation) for the past 15yrs something drastic WOULD have been done a long time ago, or be done on Friday to fix it. After all, theres no driver to fix something that doesnt really need fixing is there? Think about the last time you went to extreme measures to fix something that wasn't much of an issue...
Comment: Inferred Govt spending BOJ Pressure materialising:

Japanese economy minister Nobuteru Ishihara was quoted as saying by Japanese media hours that he hopes BOJ will take appropriate decision at the BOJ policy review meeting concluding tomorrow, especially in light of Shinzo Abe's announcement of a bigger-than-expected fiscal spending package a day before, Reuters reports.
Comment: This has just come in from Reuters -

1. REUTERS REPORTS BOJ IS PREPARING EASING MEASURES DUE TO PRESSURE FROM JAPAN GOVT

- So as analysed above, BOJ easing may likely end up being a function of JPN government easing.
Only 7 trillion yen. Is that enough for this pair to go up ?
Reply
28trn in total - and this is just the GOVT - the BOJ has 10x more capacity to ease, hence why i talk about BOJ action being a function of govt
Reply
Friend. You are making too many mistakes. You should simplify your thoughts. I follow you last day. You had a good idea but you were wrong. Look at your green circles at your chart. 90% wrong..
Reply
QuantumLogicTrading VictorVJJustice
What idea was that? this isnt simplifying thoughts game - clearly if you read below govt pressure is building.. lets wait and see what happens - i dont remember making any pre-BOJ calls so i dont know how 90% are wrong. What green circles?

PS i see you with 2 charts - lets see your opinion some more since its so great!
Reply
streetgainer VictorVJJustice
Nah, you don't know what you're talking about. This persons calls are pretty damn accurate.
+1 Reply
VictorVJJustice streetgainer
I agree with you (I dont have idea what I am talking :) ). It was just a friendly advice to make it simple. No need to continue
Reply
streetgainer VictorVJJustice
And I agree with Quantum, post some damn ideas and charts before you criticize.
+1 Reply
Cheers for the support!
Reply
I hope so too. I got a long position :(
Reply
kujason91 kujason91
to at least TP1 ?
Reply
United States
United Kingdom
India
Deutschland
España
France
Việt Nam
Italia
Polska
Brasil
Россия
Türkiye
Indonesia
Malaysia
日本
한국
简体
繁體
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing Support Priority Support Report Issue Ideas Published Followers Following Private Messages Chat Sign Out