Bank of Japan

Now that the Bank of Japan has joined other central banks such as Denmark, Sweden, the ECB, and Switzerland into pushing its rates into what until just two years ago was considered the monetary twilight zone below the zero bound, and in the process sending a record $5.5 trillion in government bond yields negative...

... which quickly puts into in context all the recent warnings about physical cash being eliminated (because as a reminder negative rates and cash simply can not coexist as the latter provides a ready immunity from the former), such as the following:

Submitted by Pater Tenebrarum via Acting-Man.com,

Let’s Do More of What Doesn’t Work

It is the Keynesian mantra: the fact that the policies recommended by Keynesians and monetarists, i.e., deficit spending and money printing, routinely fail to bring about the desired results is not seen as proof that they simply don’t work. It is regarded as evidence that there hasn’t been enough spending and printing yet.

BoJ governor Haruhiko “Fly” Kuroda: is that a windshield I’m seeing?

As extensively discussed yesterday in the aftermath of the BOJ's stunning decision to cut rates to negative for the first time in history (a decision which it appears was taken due to Davos peer pressure, a desire to prop up stock markets and to punish Yen longs, and an inability to further boost QE), there will be consequences - some good, mostly bad.

Via Scotiabank's Guy Haselmann,

By surprising markets with a move to a negative deposit rate, the Bank of Japan gave investors temporary reprieve, providing a much needed opportunity to pare portfolio risk at better prices.  Unfortunately, the improvement in financial asset prices will be short-lived; except, of course, for long-maturity Treasuries.

As we noted earlier, in a paradoxical U-turn, one which caught everyone by surprise as a result of Kuroda's own promise just one week ago not to engage in NIRP...

... and two months after the ECB's December 3 disappointing announcement led to a historic surge in the EUR, today countless macro hedge funds have been left reeling with huge losses once again, as many had recently turned bullish on the Yen...

... only to be eviscerated by the BOJ's negative rates announcement.