Japanese stocks followed thru with what the Nikkei futures Monday were implying and rose 4.4% as TEPCO said “by the end of today, power will be supplied to some equipment at reactors 1 to 4.” Once fully stabilized we can better quantify what comes next both in terms of the actual reconstruction in Japan but also what the full impact will be to the supply chain throughout the world. Also, the inflationary implications for the global economy of what comes next in Japan thru massive imports of raw materials and central bank money printing to finance it will be a main factor in how the world responds. The UK and BoE has a big inflation problem on their hands as Feb CPI was up 4.4% y/o/y, above expectations of 4.2% and the most since Aug ’08. A separate figure, Retail Price Inflation, rose 5.5%, the highest since ’91 and Gilt yields are jumping by 9 bps. The BoE currently has rates well below the level of inflation at .5%.
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