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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Wyätt Gwyön who wrote (3271)	3/31/2004 4:09:53 PM
From: russwinter	Read Replies (1) of 116555

I can't get the link to the pdf, but if you do a google for 'Mechanics of MoF treasuries sales to BOJ", you will get a RBC Capital synopsis of the necessary relationship between the BOJ and MOF in these operations. I don't see how one can act unilaterally, or even how the two in tandem can act without support from the legislature. On the last point, the MoF has a borrowing ceiling on what are called Foreign Exchange Financing Bills (FEFBs). To exceed that ceiling for FX purposes, the MoF needs to sell it's foreign currency bonds to the BoJ for Yen, and if the BoJ refuses to cooperate? It seems logical that this is in disarray right now. One question I had for the thread is this? There needs to be a supplemental budget for FEFBs for the MoF to carry on (as they can't print Yen, only the BoJ can)past March, in a meaningful fashion. Have they been "adequately" funded for $30-$50 billion a month interventions?

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