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Realistbear

Japanese Bond Markets Point To Sharply Higher I R Hikes

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http://freeserve.advfn.com/news_Japanese-g...s_15579810.html

Japanese govt bonds end mostly weaker amid higher short-term rates

TOKYO

(XFN-ASIA) - TOKYO (XFN-ASIA) - Japanese government bond (JGB)
prices finished mostly lower as investors fretted that higher interest rates in
the short-term money market would eventually spread to the government debt
market, dealers said.
The yield on the bellwether two-year debt -- generally considered the most
sensitive to central bank monetary policy -- was at 0.840 pct, up sharply from
0.785 pct at the close yesterday
.
The yield on the lead five-year bond ticked up to 1.355 pct from 1.345 pct
late yesterday, while the yield on the 20-year debt was at 2.175 pct, up from
2.170 pct previously.

Given Japan's status as the creditor backing the "Miracle Economy" of HPI and MEW made possble by irrationally low rates (for the UK) any IR hikes in Japan will quickly translate into hikes here whether Gordon likes it or not. The Paymaster calls the shots now that global tightening is in place.

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Hello rb

Quick question :

When did the carry trade start… some say 2001 some say 2003.

If 2003 it (the carry trade) could be the reason that asset prices all over the world

Have risen so dramatically since then.

I recon that uk house prices were due a correction as early as 2003, would I be correct

In thinking that the carry trade has been responsible for most of the hpi we have seen since?

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Hello rb

Quick question :

When did the carry trade start… some say 2001 some say 2003.

If 2003 it (the carry trade) could be the reason that asset prices all over the world

Have risen so dramatically since then.

I recon that uk house prices were due a correction as early as 2003, would I be correct

In thinking that the carry trade has been responsible for most of the hpi we have seen since?

From what I read the Japs have been pumping money into the system for at least a decade. They began internal tightening on 20th March this year which has yet to make its way through to a BoJ move. Some believe the March action has already shown up in the UK in the form of some small IR hikes in home loans and higher savings rates starting to appear.

The availability of cheap money picked up after 2000 after the dot.com crash andf again after 9/11 hit when Al Greenspan's policy shifted to re-inflate the economy with 1% IR. Gordon Brown aped Al by keeping UK rates low over the same period which many believe are directly responsible for HPI and MEW. Not only did IR dip well into accomodative territory, lending standards dropped also allowing people to borrow at dangerous multiples. Now we read that Nationwide and B & B are considering lending to sub-prime borrowers who have even had a CCJ on their record for non-payment of debt or mortgage payments.

All of this has been over inflating the house market and had it not been the availability of cheap money from Asia we would not be seeing anything like the HPI we have today. Its artificial in my view and as such lacks the fundamentals to keep it going. Al Greenspan and Mervyn King have expressed the same view and they know infintiely more about these things than most of us.

The Japanese adjustments--the carry trade--may be the instrument to burst the commodity bubbles worldwide and I include house prices in the "commodity" category because they have become trading items given the amount of speculative buying.

http://news.bbc.co.uk/1/hi/business/5018800.stm

Japanese to start hiking SOON!!!! :D

Japanese prices continue to rise
Japanese shoppers are starting to spending again as wages rise
Japanese consumer prices were higher in April than a year ago, the sixth month in a row they have risen, lifting hopes that deflation has been shaken off.
Many analysts are now forecasting that the pick up in price growth will prompt the Bank of Japan to start raising interest rates over the summer months
.

YES! The BoJ look certain to start the process soon. High IR here come. HPI there it goes........... :lol:

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From what I read the Japs have been pumping money into the system for at least a decade. They began internal tightening on 20th March this year which has yet to make its way through to a BoJ move. Some believe the March action has already shown up in the UK in the form of some small IR hikes in home loans and higher savings rates starting to appear.

The availability of cheap money picked up after 2000 after the dot.com crash andf again after 9/11 hit when Al Greenspan's policy shifted to re-inflate the economy with 1% IR. Gordon Brown aped Al by keeping UK rates low over the same period which many believe are directly responsible for HPI and MEW. Not only did IR dip well into accomodative territory, lending standards dropped also allowing people to borrow at dangerous multiples. Now we read that Nationwide and B & B are considering lending to sub-prime borrowers who have even had a CCJ on their record for non-payment of debt or mortgage payments.

All of this has been over inflating the house market and had it not been the availability of cheap money from Asia we would not be seeing anything like the HPI we have today. Its artificial in my view and as such lacks the fundamentals to keep it going. Al Greenspan and Mervyn King have expressed the same view and they know infintiely more about these things than most of us.

The Japanese adjustments--the carry trade--may be the instrument to burst the commodity bubbles worldwide and I include house prices in the "commodity" category because they have become trading items given the amount of speculative buying.

Japanese prices continue to rise
Japanese shoppers are starting to spending again as wages rise
Japanese consumer prices were higher in April than a year ago, the sixth month in a row they have risen, lifting hopes that deflation has been shaken off.
Many analysts are now forecasting that the pick up in price growth will prompt the Bank of Japan to start raising interest rates over the summer months
.

YES! The BoJ look certain to start the process soon. High IR here come. HPI there it goes........... :lol:

Excellent analysis.

How long, do you estimate, before UK mortgage rates will be effected .

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Excellent analysis.

How long, do you estimate, before UK mortgage rates will be effected .

I am no banking expert but it seems that the 20th March moves by the BoJ took about 6 weeks to filter through to the UK. When it becomes clear that the BoJ are going to move this summer it will affect the markets immediately. Lenders will begin factoring in hikes in anticipation and fixed term mortgages may dissappear for awhile as the amount of IR hikes that will follow in the debtor nations maybe unknown. IMO, a .25% hike in Japan will NOT be a .25% hike at the consumer level as each bank in the chain will want a slice of the action. Thus, a .25% hike by the BoJ may end up being 1% in the consumer's hands.

Just checked the FTSE and there was a sharp dip at 12:30--it could be a reaction to the Japanese news? News travels fast and the markets are hyper-sensitive to any news these days--that's why I got out a couple of weeks ago.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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