FX Should Heed JGB Theatrics
It is now six weeks since BoJ Governor Kuroda announced a new program of monetary easing, and still the JGB market remains unsettled. One benign interpretation of the turbulence is that liquidity has dried up and so JGB price action should be disregarded given the allegedly small volumes involved. That interpretation has just been laid to rest. The Japan Securities Dealers Association reported this week that JGB turnover in April hit an 11-month high. As an engineer might put it, this price action is signal not noise.
Click here to read the full report: UBS