Let's do this one more time this year

Today will be my last day of writing for the year as I head off on a family adventure. I want to express my gratitude to my readers for taking out the time each day/week to read what I find important and have to say. Whatever holiday you celebrate I wish you a special time with your family and friends and I'll 'see' you on January 2nd.

One thing on the government shutdown possibility, I've been doing this long enough not to care because a deal always gets done and if the government does shut down for a short period of time, I guarantee that it will eventually reopen.

So, a day after the BoJ kept interest rates unchanged at just .25%, the November Japanese CPI rose 2.9% headline vs 2.3% in October and the core/core rate (ex food and energy) was up by 2.4% vs 2.3% in the month before. Both as expected but the headline figure is now above 2% for 32 straight months. As in the face of that the BoJ still expressed its interest in going slow and being patient with rate increases, this behavior reflects that the BoJ really is in bed with the Japanese government in that with so much debt the government constantly needs to roll, the higher interest rates go, the more expensive it gets.

As the data was in line, JGB yields were little changed but the yen is bouncing after yesterday's selloff. The Nikkei was down slightly, by .3%.

Wash, rinse, repeat. The BoJ drags its feet, the yen weakens, the Ministry of Finance threatens intervention, BoJ talks tough and hikes rates, yen rallies. BoJ doesn't follow thru with more hikes, yen weakens, the MOF threatens intervention. Overnight from the Finance Minister, we "are deeply concerned about recent currency moves, including those driven by speculators" and "we will take appropriate action if there are excessive moves in the currency market." We'll see if the BoJ hikes in January.