Oil may have just stopped the Bank of Japan.
The fact is that in late September 2016, the Bank of Japan embarked on a new monetary policy of targeting a yield of 0% on 10-Year Japanese Government bonds.
What this means is that the Bank of Japan will intervene in the market to maintain a 0% yield, and this involves aggressively devaluing the Yen against the $USD. You can see this in the chart below.
With the Fed expected to further tighten financial conditions following its now guaranteed March 15 rate hike, and the ECB recently announcing the tapering of its QE program from €80 to €60 billion monthly having run into a substantial scarcity of eligible collateral, the third big central bank - the BOJ - appears to have also quietly commenced its own monteary tightening because, as Bloomberg calculates looking at the BOJ's latest bond-purchase plan, the central bank is on track to miss an annual target, by a substantial margin, prompting investor concerns that the BOJ has commenced its ow
Back in November, when describing the perverse global fund flows in which record money creation out of the BOJ and ECB amounting to roughly $200 billion per month was being used indirectly, via spread differentials, to create demand for US Treasuries by foreign official and private investors - an observation first made by Deutsche Bank - we dubbed it "global helicopter money", and were surprised that "nobody has noticed" what is going on.
European bonds fell and stocks rose led by banks and retailers as surging inflation data prompted investors to switch into reflationary assets even as speculation about ECB tapering has returned. Asian stocks and US equity futures declined. The Yen and gold advanced after Trump’s firing of the U.S. acting attorney general added to concern over the unpredictability of decisions in the new administration.
Moments ago the BOJ concluded its two-day meeting, and unlike a year ago when Kuroda unveiled NIRP, this time there were no surprises or fireworks. In a 7-2 decision (Sato and Kiuchi voting against), the BOJ kept its rate at -0.1% as expected. The Central bank also kept its 10Y yield target at around 0%.