For those who are selling USDJPY at 163 and think it will ever go to 150!
You need $100 bln intervention and 1 25 bps hike in July.
Let me know if that is likely?
🚨 BOJ IS PLAYING WITH FIRE NOW
And the end result would be a crash even bigger than 2008.
Today, Japan's minister of Finance calls to increase investment in domestic Japanese investments.
She even hinted at selling foreign assets and converting them back to yen.
Now, this strategy sounds smart on paper until you understand the consequences.
Japan's foreign assets are worth over $1T, with most of them sitting in bonds and global currencies.
If BOJ sells those, the bond yields around the world will spike.
At the same time, it'll strengthen the yen and force investors to sell their assets.
This includes stocks, bonds, precious metals, crypto, and any other major asset.
The result would be a crash across all assets, including the Japanese stock market.
In August 2024, we witnessed a similar event when over $5 trillion vanished within a week.
This time, the yen carry trade has become bigger, so the crash would be bigger than anything we have ever seen.