The BOJ is back to their old tricks of attempting to manipulate the market via short-term policy measures as opposed to actually constructing long-term resolutions to their problems. Trade the news reports on the action:
“Asian equity market saw little volatility in the final session of the week before an abrupt spike in the Yen pairs renewed speculation of second round of intervention. USD/JPY – which had made fresh post-intervention lows in US hours around 84.30 – spiked as high as 85.30, but saw no confirmation from Japan officials as in the case of the first intervention last week. Subsequently, rumors circulated BOJ Gov Shirakawa could potentially resign, prompting further retreat in USD/JPY. Finally, Shirakawa officially denied he would consider stepping down. Nikkei225 closely tracked the USD/JPY rumor mill rollercoaster, trading down as much as 1.5% on Yen strength, spiking toward unchanged levels on intervention speculation, and ending the day down 1% on negated intervention.”
In other words, they’re just shuffling deck chairs on the Titanic. I wonder how much longer we are going to be living in this world where people are fooled into thinking that Central Banks are all powerful and actually out to help the general public and not the bankers for whom they work? Perhaps more importantly, when are we going to start focusing on general policy that actually helps build the foundation for a sustainable long-term economic recovery?
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.