Loading ...Just as US equity futures were about to roll over following some very substantial misses yesterday by the likes of Google, Microsoft, Starbucks and a plunge in Visa shares, overnight who came to the markets’ rescue but the BOJ, when shortly after midnight Bloomberg reported that “according to people familiar with talks at the BOJ” which is the traditional keyword for a BOJ source testing out the market’s reaction, Japan’s central bank may “help” local banks to lend by offering a negative rate on some loans. This happens just months after the BOJ unleashed negative rates thereby “penalizing” banks who hold too much excess reserves. So just four months after the BOJ went nuclear on its own banks, now it has had a 180 degree change of heart.
The result was immediate: the Yen tumbled, USDJPY spiked and the Nikkei soared by 200 points in the blink of an eye.