How Kuroda fooled BOJ members on negative rates
We all know that Kuroda fooled the markets on negative rates, denying their consideration right up to a January 21 interview.
Which, in effect, has cost him credibility, but also bullets in his fight for a weaker yen.
Such a shame.
This piece from Reuters takes an inside look at Kuroda even fooled the BOJ Board (bolding is mine):
- Most of the nine board members were only told of the scheme in the week leading up to Friday's rate review, according to interviews with more than a dozen officials familiar with the deliberations.
- "If you're a board member, you're told about the plan at the last minute," said a former board member, speaking on condition of anonymity. "It's hard to argue against it or draft a counter proposal when there's so little time left."
- Before leaving for the annual World Economic Forum in Davos on Jan. 22, Kuroda instructed his staff to come up with options for further easing
- Plan formulated by four top officials from the monetary affairs department
- At the BOJ's headquarters in Tokyo, monitoring signs alert staff with a flashing red light to show when a board member has visitors in their rooms on the eighth floor.
- In the days leading up to the Jan. 29 meeting, the lights for the three swing voters on the divided board glowed red for hours, as a handful of top officials lobbied furiously for the plan.