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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: ild who wrote (4306)	1/3/2004 9:38:57 AM
From: russwinter	Read Replies (3) of 110194

Here's a little exercise on how costly these interventions are for Japanese taxpayers. The 4Q and 1Q, 2004 BOJ report to the government should get interesting. "Lucy, you got some splaining to do!" On Friday the USD dropped 0.450% to the Yen. I'll use the 5 year UST as the proxy for BOJ holding of US debt. Friday the 5UST dropped 0.507% in value. Total loss for the day on the $200 billion the BOJ likely committed to USD debt recycling in 2003 was 0.957% or about $2 billion for just one bad day. Of course the total holdings (and loss) is much higher. December 30 – Bloomberg: “Japan sold its currency in December for a 10th month this year, according to the Ministry of Finance, trying to stem gains that threaten the nation’s exports and may slow economic growth. The Bank of Japan sold 2.25 trillion yen ($21 billion) from Nov. 27 through Dec. 26. The figure boosts yen sales for 2003 to a record 20.1 trillion yen.”

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