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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: This updates brought to you by Interactive Brokers and CME Group.

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Speaker 1: dock index futures are lower after a rally sand the

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Speaker 1: SNP five hundred index to its highest close this year,

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Speaker 1: and as investors await further assurances that central banks will

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Speaker 1: continue to support growth who check the markets every fifteen

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Speaker 1: minutes throughout the trading day on Bloomberg. SNP eveny futures

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Speaker 1: down five points, Dow Emiti futures down twenty eight and

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Speaker 1: NAS doc emity futures down eleven. Docks in Germany's up

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Speaker 1: one point three percent. Ten year treasury of seven thirty seconds,

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Speaker 1: the yield one point nine five percent yield on the

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Speaker 1: two year point nine five percent NIME ex scret oil

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Speaker 1: down two point eight per cent, or a dollar seven

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Speaker 1: to thirty seven forty three of barrel comes gold is

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Speaker 1: down less than a tenth of upper cent down sixty

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Speaker 1: cents twelve eight. Announced the euro at allar eleven seventeen,

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Speaker 1: the yen one thirteen point six one. That's a Bloomberg

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Speaker 1: business flash, Tom and Mike Carabosco, thank you very much. Well.

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Speaker 1: The Bank of Japan is the first central bank this

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Speaker 1: week to announce its decision. We will get it tomorrow

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Speaker 1: overnight in the In the US, John Vale will not

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Speaker 1: be staying up. He'll read about it. He'll get the

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Speaker 1: email in the middle of the night. He is, of course,

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Speaker 1: chief Global Strategist, head of Investment Strategy Group at Nico

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Speaker 1: Investment Management, so he Uh, he's paid to keep a

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Speaker 1: very close eye on what happens with the Bank of Japan.

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Speaker 1: Bank of Japan. At their last meeting on January surprise, Well,

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Speaker 1: I would say shocked. The markets went to negative interest

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Speaker 1: rates didn't work out very well. Uh the end, instead

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Speaker 1: of getting weaker, got stronger. Banks were very upset because

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Speaker 1: their computer systems were set up to handle negative interest rates.

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Speaker 1: A lot of criticism uh for Krotoson. Uh. Does that

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Speaker 1: mean they're much less likely to do something like that

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Speaker 1: this time? John. Yeah, So now the consensus is that

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Speaker 1: they will do nothing this meeting and perhaps wait till April.

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Speaker 1: But you never know with Kurotas and he does like

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Speaker 1: to surprise the markets, and so one cannot give a

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Speaker 1: zero probability of them doing anything this time. Maybe it

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Speaker 1: might be as high as thirty or fort but they

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Speaker 1: probably would not do anything on the negative interest rate front,

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Speaker 1: but concentrate on more quantitative purchases instead. Quantitative easing or

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Speaker 1: q q E is what they like to call it

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Speaker 1: in Japan. Uh, they've been doing it for years now

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Speaker 1: to little effect. What more can they do? How is it?

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Speaker 1: How's it going to be different if they did that, Well,

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Speaker 1: they might concentrate more on corporate bonds, for instance, like

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Speaker 1: the ECB has done, and that might lower the borrowing

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Speaker 1: rates for corporations and stimulate investment. They also might do

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Speaker 1: more on e t F equity e t F s,

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Speaker 1: which could pump up the stock markets. But you're right

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Speaker 1: that there's a lot of diminishing returns in some cases,

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Speaker 1: and additional um qui purchases are not necessarily going to

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Speaker 1: change the role of Japan. But we have to remember

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Speaker 1: too that Japan is not supposed to be growing at

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Speaker 1: two or three percent a year. It was our GDP.

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Speaker 1: One percent is probably their normal, so we shouldn't expect

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Speaker 1: too much. Would you explain to me? And I love

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Speaker 1: this language companies which are proactively making investment in physical

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Speaker 1: in human capital. This is economic gobbledygook to say we're

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Speaker 1: so desperate, we're gonna buy equities the Bank of Japan proposes,

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Speaker 1: I'm not sure they've done this. They're gonna go out

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Speaker 1: and buy shares of Toyota and bring them onto the

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Speaker 1: bank's balance sheet. They've actually been doing that for a

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Speaker 1: long time. They hadn't done it for monetary policy reasons,

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Speaker 1: but they've been buying equity E t F since two

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Speaker 1: thousand and nine or two dozens have a very small amounts,

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Speaker 1: and not for monetary they Their purpose for them buying

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Speaker 1: equity t fs has all along been just a show

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Speaker 1: of confidence, uh, and to try to stimulate confidence in

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Speaker 1: the economy and in the stock market. But there's a

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Speaker 1: possibility that they might bump that up into more serious mode.

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Speaker 1: I mean, we talked about the upward over negative rates

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Speaker 1: and you know, buying corporate bonds. I think all of

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Speaker 1: our listeners would find it bizarre that part of QI

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Speaker 1: or q q E or q q QI is sure

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Speaker 1: for sure yelling to buy shares of name the company

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Speaker 1: Amalgamated Steel. It does It does seem like Alison Wonderland

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Speaker 1: sort of scenario. Um, even buying corporate bonds by the

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Speaker 1: ECP was is moving into the private sector. I guess

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Speaker 1: you could just say that the Fed buying UH Fannie

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Speaker 1: May bonds and it's q over the last what is it,

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Speaker 1: uh seven years is a form of intervention in the

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Speaker 1: private sector. They were trying to get mortgage rates down right,

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Speaker 1: But anyway, Um, yes, it's possible that equities is the

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Speaker 1: is a new front for central banks. I mean, Mike,

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Speaker 1: I don't know how to equate equity purchase with all

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Speaker 1: of the variables there that we know and love with

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Speaker 1: negative interest rate in that debate is so Prohica Corona

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Speaker 1: on the same page as she Abby these days. Yes,

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Speaker 1: I think there work being pretty closely together. Um. And

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Speaker 1: they had the same goal, that is to stimulate UH

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Speaker 1: spending because you were spending and capital spending and uh

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Speaker 1: unfortunately that they are aligned in that regard. How are

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Speaker 1: they doing? I mean, give us an update on real

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Speaker 1: and nominal g d P with the Japan I believe

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Speaker 1: I see a negative one point one statistic. Yeah, the

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Speaker 1: fourth quarter last year was very disappointing, especially consumer spending

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Speaker 1: was to have more than three percent annualized in the quarter.

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Speaker 1: So yeah, it's a mixed message and they're not happy.

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Speaker 1: Neither of those two gentlemen are happy with the way

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Speaker 1: things are going, so they do have a pretty big

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Speaker 1: incentive to try for more. And um, I guess it's

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Speaker 1: sort of a one way street. They're not going to

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Speaker 1: give up. I mean, I mean, I'm dealing with the chart,

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Speaker 1: folks that thirty years of the US with a sloping

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Speaker 1: downward real g d P constructively back twenty years, I

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Speaker 1: can say Japan at least is flat, except it's flat

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Speaker 1: at zero point zero. I mean, the regression back twenty

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Speaker 1: years is a quarterly statistic of zero point six percent,

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Speaker 1: which is barely growth. Right, Um, I'd be supposed if

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Speaker 1: it was that low, that's the that's phenomena of the

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Speaker 1: real that's real. Well, it's been slow growth, and the

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Speaker 1: truth is not many people maybe realize this is that

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Speaker 1: the potential growth as measured by the bank, as you said,

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Speaker 1: under one, it's yeah, it's about one or less so

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Speaker 1: um with a declining population and whatnot. It's uh, it's

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Speaker 1: hard to Let's come back John Vale. Where this with

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Speaker 1: Nko As we look at the Bankage van, a very

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Speaker 1: central Bank week Bloomberg surveillance, we're cutting down to the

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