Finance, Banking, and Regulation
FMI’s review of this morning’s January Housing Starts report and January U.S. Dollar and Trade Prices results, plus January Bank Lending & Money Supply data and the latest High-Frequency Inflation Indicators.
The Bank of Japan’s (BOJ) failed negative interest rate policy (NIRP) is provoking increased opposition among the big banks and the Financial Services Agency (FSA), the ministry which protects them
Key points for Richard Katz's TOE Alert include: - Stock prices fell 5% on Tuesday and another 2.4% Wednesday morning to the lowest level since Kuroda’s “monetary bazooka” of October 2014; - The yen stands at ¥114.6/$, the strongest level since October 2014; - Yields on JGBs out to ten-year maturity are now in negative territory, for the first time; - Banks, pension funds, insurers all invest heavily in JGBs; - Banks have already made big cuts in the rates they pay depositors, but are not expected to go into negative territory for households or SMEs; - All this means a squeeze on earnings at banks, insurers and pension funds
Richard Katz's February 2016 issue of the Oriental Economist