Bullish Traders Erase Yen Losses as BOJ Stands Pat

The transcript discusses the Bank of Japan's (BOJ) limited options in response to Brexit, highlighting the safe haven flows into yen assets. It covers concerns about excessive currency volatility, with differing views between the US and Japan. The impact of negative interest rates on Japanese banks, particularly Tokyo Mitsubishi's threat to exit the JGB market, is examined. Finally, it explores the potential public effects of these bank actions and the shift towards fiscal policy to revive Abenomics.

What was the main reason the BOJ felt limited in its actions during the Brexit situation?

• Lack of coordination with the US

• Fear of yen weakening too quickly

• Pressure from European banks

• Desire to increase interest rates

What is the main concern of the G7 regarding currency markets?

• Excessive volatility

• High inflation rates

• Low interest rates

• Trade imbalances

Why are Japanese banks particularly upset about the current economic policies?

• High inflation rates

• Negative interest rates

• Increased competition from US banks

• Lack of government support

What action did Tokyo Mitsubishi Bank threaten to take in response to negative interest rates?

• Stop being a primary dealer in the JGB market

• Close international branches

• Increase lending rates

• Merge with another bank

What economic strategy is Mr. Abbott expected to rely on to revive Abenomics?

• Monetary policy

• Fiscal policy

• Currency devaluation

• Trade agreements