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Private Equity & Investment Transactions Update 31st July, 2024. INVESTORS REACT TO BOJ'S INTEREST RATE HIKE “The Bank of Japan said on Wednesday it is raising its short-term interest rate to 0.25% and will gradually reduce the amount of bonds it is buying under its quantitative easing programme... ...At the end of its two-day policy meeting, the central bank said the decision to raise its policy rate was unanimous and the amount of bonds it buys per month will fall to 3 trillion yen ($19.65 billion), half the current rough target, by early 2026.” Observation: Several investors have casted their perspective on the same. It was rumoured that early this month, the currency regulators in Japan intervened in the currency trade by purchasing yen. Investors will be able to confirm the nation's market moves later on Wednesday when the Ministry of Finance releases its monthly report on yen interventions. The majority of experts believed that the BOJ would rather to postpone until it was certain that private consumption would rebound before raising interest rates in July. https://lnkd.in/gJXij6yi Source: Reuters

Bank of Japan board members turned overwhelmingly hawkish at their April policy meeting, with many calling for raising interest rates steadily to forestall risks of an inflation overshoot, a summary of opinions at the meeting showed. Learn more: https://lnkd.in/g-iXFcjE Wealth management and financial planning in Japan: ARGENTUMWEALTH.COM #wealthmanagement #financialplanning #japan

Trade Opportunity 💹 The Bank of Japan (BOJ) is expected to keep rates steady at the conclusion of its latest meeting on Thursday, amidst uncertainties arising from recent political changes within Japan and external developments, particularly in the United States and the trajectory of the world’s largest economy. Since its previous meeting in September, the BOJ has signaled a more cautious stance on its outlook for rates. Significant updates due shortly after this meeting may substantially influence the bank’s next decision. Read more 👇 https://lnkd.in/gRBWsESG

Yen plummets as Ishiba signals no immediate rate hike from BOJ #bne #bneEditorsPicks #Japan #FX Japan's yen has taken a significant hit, plunging to 147.15 against the US dollar, following dovish comments from Prime Minister Shigeru Ishiba regarding interest rates. In a stark shift from his recent campaign rhetoric, Ishiba stated, “I do not believe that we are in an environment that would require us to raise interest rates further,” after meeting with Bank of Japan Governor Kazuo Ueda. This marked the yen's largest single-day decline since June 2022, raising concerns among market analysts about the future trajectory of monetary policy, as reported by CNBC. Ishiba's remarks were particularly striking given his historical stance as a critic of previous Liberal Democratic Party administrations, including the late Shinzo Abe's ‘Abenomics,’ which promoted monetary easing. Despite this sudden pivot, analysts remain hopeful about a potential rate hike later this year. Stefan Angrick, a senior economist at Moody’s Analytics, maintains that a rate increase could occur as early as the October meeting, citing optimistic insights from the latest BOJ meeting minutes.

(Bloomberg) -- Japan likely stepped into the currency market for a second straight day on Friday, a Bloomberg analysis of the central bank’s current account indicates. Tokyo’s latest market entry was likely around ¥2.14 trillion ($13.5 billion), based on a comparison of Bank of Japan current account data and money broker forecasts. The bank expected its current account to fall ¥2.74 trillion due to fiscal factors including government bond issuance and tax payments on Wednesday, much bigger than a drop of about ¥600 billion estimated by Central Tanshi Co. and Ueda Yagi Tanshi. The yen strengthened sharply by as much as 0.9% to 157.38 per dollar on Friday after producer prices data in the US. The move came after a suspected intervention on Thursday night, when the government likely spent $22 billion to prop up the yen following weaker-than-expected US inflation data. The suspected second intervention, if confirmed, would be a fresh example of the government conducting a follow-up move after a larger-scale operation to keep traders on alert. Bloomberg analysis of the central bank’s current account and money broker estimates earlier indicated that a two-punch operation occurred in late April and early May. Japanese finance ministry data showed a follow-up intervention took place in October 2022. Link: https://lnkd.in/eQiyNmQt My take: The BoJ spent over $35 billion last week intervening to prop up the yen. Why? Because as yen slides, inflation pressures in Japan build and that would force them to hike rates which will send shockwaves across global bond markets. Stay tuned, this is getting interesting. Will macro traders break the BoJ like Soros once broke the BoE? Doubt it but you never know! Technical note: It’s up to the Ministry of Finance to intervene and it uses the BoJ as its agent to do so . The BoJ acts on intervention.

Bank of Japan is trapped and increasingly dependent on the Fed's stance. Overview of USD/JPY Apparently, the Japanese authorities did conduct a currency intervention on April 29th. The USD/JPY pair came close to the 160 mark, after which it quickly fell to 154.50. A weak yen carries too many problems for the Japanese economy. Rapid currency depreciation leads to higher import costs, which, amid the threat of persistent inflation, may trigger a rise in domestic inflation in Japan in the second half of the year. The main driver of the yen's weakness is the yield spread between US and Japanese bonds. As the forecast for the Federal Reserve rate cut continues to shift further and further into 2025, and the Bank of Japan exhibits manic caution and hesitates to raise rates, any confirmation of this scenario will push USD/JPY higher, forcing Japanese authorities to intervene again and again. This will continue until the yield spread starts changing in the opposite direction. Read more: https://lnkd.in/dpUb_9Tr Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69.82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford the risk of losing your invested funds. This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise.

The yen's recent rapid decline is causing currency strategists to predict a potential fall to 155 or 160 against the dollar in the upcoming weeks. Some major players like Bank of America Corp., Mizuho Securities Co., and Asset Management One Co anticipate the yen hitting 160, with the currency already weakening to 150+ against the dollar, its lowest since late-July. The possibility of the yen hitting 160 raises concerns about official intervention by Japanese authorities, as highlighted by Finance Minister Katsunobu Kato. Experts from Mizuho Securities Co emphasize the impact of US rates and the Bank of Japan's inaction on the yen's trajectory. The market remains divided on the yield gap between US Treasuries and Japanese government bonds, with political uncertainty further fueling the yen's decline. As Charu Chanana of Saxo Markets notes, factors like the US non-farm payroll report and the upcoming elections in Japan and the US continue to influence the yen's performance. Amidst the uncertainty, traders are closely monitoring developments and preparing for potential market shifts in the coming weeks.

*** 20 big figure move in USDJPY*** Yen carry trade has its history in Alan Greenspan’s rate cuts in 1998. It’s gotten bigger since. Few weeks ago, Bank of Japan (BoJ) sold $100bn at USDJPY 160. If the BoJ buys back USD now it will make them *Greatest FX trader* in history 😄 To understand the upsizing of the Yen carry trade, one must look back to Alan Greenspan's Fed and the events of 1998. Fed Chair Alan Greenspan implemented three consecutive rate cuts from September to November 1998, amidst (carry) Yen unwinds, citing concerns over rising credit spreads and *financial stability*, even though the U.S. economy didn’t necessarily need the cuts at that time. The emergency rate cut during the 1998 yen carry unwind was strongly bullish for U.S. assets, catalyzing the dot-com boom, which lasted until it burst in 2000. This marked the beginning of an increase in yen carry trades as traders realized that the U.S. Fed—and, by extension, other central banks—would support the trade. As a result, Yen carry trades grew larger. It remains to be seen if Chair Powell will take a different approach. The "Yen carry trade" has expanded significantly since 2007-08, with current estimates putting its size at around $4 trillion, four times larger than then. The impact of the yen carry trade in 2007-08 is often underreported, with China’s current account surplus receiving much of the blame. Japan’s role, as a U.S. ally, was either deliberately overlooked or misunderstood. For those who do not use leverage and are not vulnerable to margin calls, there are now great long-term opportunities in U.S. assets. U.S. assets are likely to recover, and the carry trade will probably make a comeback. The world will continue to move forward. “What do you think? Tell me in the comments Do you have any alternate views or explanations? I'm curious to hear your thoughts. Thanks ! #BOJ #carrytrade #yencarrytrade #nikkei #japan #bankofjapan #AlanGreenspan #dotcom #2008creditcrisis #1998crisis