A.M. Update

By now most are probably well aware of the BOJs 5 to 4 vote in the early overnight session to increase their QE from $70 trillion (previous level) to $80 trillion JPY as well as expand the asset classes available for monitization. The move is already being called "Banzainomics"with harsh criticism coming from former Japanese supporter, Goldman Sachs:

""We maintain our view that unless the yen continues to depreciate significantly, as a result of the latest QQE action, the BOJ is unlikely to meet its scenario for inflation to stably reach 2% during FY2015. From a political perspective, with nationwide local elections looming in April 2015, we also highlight the potential for harsh criticism of further cost-push inflation driven by the weaker yen among nonmanufacturers, SMEs, and households. Irrespective of the latest easing moves, we believe the BOJ is treading a very narrow path."

In other words, Kuroda who has recently been high fiving Abe over their success in breaking deflation's grip over Japan just sent the Nikkei up +4.8% to its highest level since 2007 at the expense of the Japanese population as their buying power which has already been crushes will only see more misery as the Yen loses against the JPY, anything much more than $110, which we have already seen with the USD/JPY trading at $111.97, the highest since 2008, will crush the economy and of course the mention of elections is that Abe and thus Kuroda, will likely not be around long enough to see their Halloween Monster come to fruition, much less have to exit from it which Kuroda says he sees no problems with.

Kuroda added the BOJ did this to "Maintain positive changes in expectations" and "Today's decision shows the BOJ's unwavering determination". However, it seems most feel their unwavering determination has everything to do with their stock market at the expense of crushing the actual economy.

While many suspect there's some F_E_D/ BOJ collusion being they just increased their already monstrous QE a day after the F_E_D cut all QE...In reality there may have been a different reason. You may recall yesterday's news/non-news event that Japan's GPIF Pension Fund will increase stock holdings from 12 to 25% (interesting again that the emphasis is on the stock market), but they'll also cut JBG (Japanese Bonds) holdings from 60% to a mere 35%. 

Over the past year the JGB market has quickly become one of the MOST ILLIQUID bond markets in the world with days passing without a single transaction, so the natural question would be, "Who is going to absorb the hundreds of billions in JGB's the GPIF is selling in a bond market that can go for days without a single transaction?". 

Suddenly the nearly 2 week old news takes on new light when the BOJ jumps in to fill that void the next or practically the same day.

Overnight in other news, besides Putin upping the ante with a harsh "Games are over speech" that is being hailed as the, most important political speech since Churchill's “Iron Curtain” speech of March 5, 1946, the Russian Central Bank raised their key rate from 8% (consensus of 8.5%) to a shocking 9.5% in an effort to halt a currency run that has stoked the flames of Russian inflation. The initial knee jerk reaction was a rubble rally quickly retraced and sent the USD/RUB to below 43, a level that would be a new record low if it holds in to the close.

Also overnight the German Xetra's trading was halted for none other than a "Computer malfunction"...

Well Wednesday's F_E_D was dull lacking a knee jerk reaction, today we have a knee jerk reaction, we'll soon find out if this is like most Central Bank knee jerk reactions like the very odd ruble crash after a 150 basis point hike overnight.