BOJ Move Is a Tide Change, Apollo's Slok Says

The video discusses the Bank of Japan's (BOJ) significant policy shift, allowing GGB yields to rise, which marks a tide change rather than a mere tweak. This decision has major implications, especially since Japan is the largest holder of U.S. Treasuries. The potential reallocation of Japanese investments from U.S. fixed income markets to domestic JGBs could impact U.S. interest rates. The BOJ's move is not seen as tightening or normalization but a necessary step due to high inflation and low liquidity in JGB markets. The BOJ's ownership of over 50% of JGBs made the previous yield curve control unsustainable.

What is the main reason for the BOJ's policy shift?

• To strengthen the yen

• To decrease U.S. Treasury holdings

• To allow GGB yields to rise

• To increase inflation

How might Japanese investors' actions affect U.S. markets?

• By reallocating funds from U.S. fixed income to JGBs

• By reducing U.S. bond yields

• By increasing U.S. stock prices

• By increasing U.S. interest rates

What is the BOJ's recent policy change NOT considered as?

• A minor adjustment

• A complete overhaul

• Normalization

• Tightening

Since when has the BOJ been keeping JGB yields low?

• 2010

• 2016

• 2020

• 2018

What is one challenge the BOJ faces with its current policy?

• High liquidity in JGB markets

• Low inflation rates

• High ownership of JGBs

• Strong economic growth