In the previous part 1 video of Weston Nakamura’s series on the Bank of Japan, Weston explains how BOJ Yield Curve Control works, and discusses the implications of being the only major central bank left who claims to still provide highly accommodative monetary policy in 2022.
In this part two video, Weston shares his long-running theory on "BOJ Press Tests,” conducted behind the scenes by the central bank, carried out by major financial media outlets, and intended to get a read on market sentiment before a potentially permanent, irreversible policy error is made - as the Bank of Japan currently works to clean up its most recent attempt at using a “press test” as it headed into the January Monetary Policy Meeting. He also shows an example of when a theoretically impenetrable yield curve control fails a at the upper-bound of the YCC range.
Watch Weston’s original video: “Why Global Markets Are Addicted to the Bank of Japan” https://youtu.be/t9l2flhMSVE
Follow Weston on Twitter for his original Bank of Japan thread, and other market commentary @acrossthespread
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