BoJ will print as much as it takes

Note that mixed earnings from IBM and INTC reported after 4pm last night but before the futures closed at 4:15pm has the futures well below fair value. Starting in Asia, the BoJ Deputy Gov said in essence they will print as much yen as possible to get to their inflation target when he said this morning that they will “do powerful easing to achieve 1% inflation…if needed.” The yen is lower and the Nikkei rallied 2% following the comments. If the BoJ is successful however, the JGB market will blow up, taking the yen with it and Japanese stocks will be the only protection for their legion of savers who have parked money in JGB’s. Buy Japanese stocks and hedge yen exposure. Following the party European and US stocks had yesterday because Spain sold 12 and 18 month debt, the rest of Asia rallied with the Shanghai index in particular rising to a 4 week high. China did say that 37 cities reported home price declines in March, up from 27 in Feb. In Europe, the British pound is rising to the highest level vs the euro since Aug ’10 after better than expected labor market data. While the Spanish IBEX is down 3%+, bonds are up ahead of an important auction of 2 yr and 10 yr debt tomorrow (more relevant than 12 and 18 mo paper). In the US, even with mortgage rates matching a new low, purchase apps fell to a 6 week low but refi’s bounced 13.5% to a 5 week high. II: Bulls 44.1 v 52.7 Bears 23.7 v 21.5

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