Tokyo

While both global monetary and fiscal policies struggle to keep aggregate demand if not rising, then at least constant, demographics continues to wreak havoc on the best laid plans of central planners around the rapidly aging world. Just last week we reported that in 2016, the US population grew at the slowest pace since the Great Depression, largely driven by the collapse in household formation as the number of Millennials living at home with their parents has hit a 75 year high.

In what may be the latest example of unintended irony, shortly after the October 7 pound sterling flash crash, which saw the UK currency plunge by more than 9% against the dollar, falling from $1.26 to $1.14, in about 40 seconds - a historic flash crash in one of the world's most liquid currencies - we presented a forensic explanation of what happened in that minute when sterling plummeted in a bidless market from Citigroup. 

Following Trump's first official meeting with a foreign leader on Thursday night (one which took place in Trump's apartment at the Trump Tower), Japanese Prime Minister Shinzo Abe said Trump was a trustworthy leader in comments after his first meeting with the U.S. President-elect, whose statements on trade and security have sparked concern in Japan. Abe told reporters that he had frank discussions in a “warm atmosphere” at Trump Tower, and said he explained his views on a range of issues, but declined to comment on the substance of the talks in a meeting that lasted more than an hour.

A strong earthquake measuring 5.6 on the Richter scale struck eastern Japan, just north of Tokyo on Monday. RT reports: Local news outlets say the quake was felt in the Saitama and Tokyo areas, with buildings swaying. Metro operations were briefly suspended on all routes in Tokyo, but services restarted four minutes later. An elevator maintenance firm in Tokyo said several elevators stopped in the metropolitan area due to the quake with commuters asked to “use emergency buttons,” according to NHK.

Back in October 2014, just after the BOJ drastically expanded its QE operation, we warned that the biggest risk facing the BOJ (and the ECB, and the Fed, and all other central banks actively soaking up securities from the open market) was a lack of monetizable supply. We cited Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, who said that at the scale of its current debt monetization, the BOJ could end up owning half of the JGB market by as early as in 2018.