Hugh Hendry's favorite position looks(and my only one in the market- short yen long nikkei) like it is set to payoff big time.
Forbes.
Last week, as the Federal Reserve officially announced the end of its long-term asset purchase program (commonly known as QE3), the Bank of Japan significantly ratcheted up its own quantitative easing program, in a surprising 5-4 split decision. Starting next year, the Bank of Japan will increase its balance sheet by 15 percent of GDP per annum and will extend the average duration of its bond purchases from 7 years to 10 years. The big move by Japan’s central bank comes amid the country’s GDP declining by 7.1% in the second quarter of 2014 (on an annualized basis) from the previous quarter following the increase of the VAT sales tax from 5% to 8% in Japan earlier this year and worries that Japan could fall into another deflationary spiral or fail to reach its stated goal of 2% inflation by 2014 (likely to be reformulated as 2% by 2015). The Government Pension Investment Fund (GPIF), Japan’s $1.1 trillion government pension fund, simultaneously announced its intentions to increase its overall equity holdings from 24% to 50% reduce its domestic bond holdings from 60% to 35%.
Forbes.
Last week, as the Federal Reserve officially announced the end of its long-term asset purchase program (commonly known as QE3), the Bank of Japan significantly ratcheted up its own quantitative easing program, in a surprising 5-4 split decision. Starting next year, the Bank of Japan will increase its balance sheet by 15 percent of GDP per annum and will extend the average duration of its bond purchases from 7 years to 10 years. The big move by Japan’s central bank comes amid the country’s GDP declining by 7.1% in the second quarter of 2014 (on an annualized basis) from the previous quarter following the increase of the VAT sales tax from 5% to 8% in Japan earlier this year and worries that Japan could fall into another deflationary spiral or fail to reach its stated goal of 2% inflation by 2014 (likely to be reformulated as 2% by 2015). The Government Pension Investment Fund (GPIF), Japan’s $1.1 trillion government pension fund, simultaneously announced its intentions to increase its overall equity holdings from 24% to 50% reduce its domestic bond holdings from 60% to 35%.
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