Market Talk December 18th, 2015

It was not just large/last option expiry but also the Friday before Christmas, the biggest party night of the year when the Bank of Japan supplied an early headache to the markets as they announced additional QE – despite leaving rates unchanged. We heard of two major announcement’s this morning, one being an extension in maturities (from 10 to 12 year) JGB’s to be purchased. The second, slightly off piste, was the purchase of ETF’s (Exchange Traded Funds) at an annual pace of Y300Bil ($2.5Bil). This is in addition to the banks existing ETF program. This news managed, temporarily, to turn a weak Nikkei higher (by 2%) but alas could not hold the turn and eventually closed on the day down 1.90%.

This post was published at Armstrong Economics on December 18, 2015.