Tag Archives: Japan





That’s the total amount of money rumored to be injected by the BOJ in order to keep the Nikkei going for a whopping 4 days. According to PTI the BOJ has offered to add an additional ¥13.8 trillion today, to go with the tens of trillions already noted previously on Zero Hedge. If proven true, this would bring the total taxpayer backstop injected in just 4 days to $700 billion dollars! This whole exercise to keep the bank holiday away is starting to be just a little expensive to Joe Peasant.

From PTI:

The Bank of Japan has offered an additional 13.8 trillion yen (some USD 170 billion) to money markets, bringing to 55.6 trillion yen the total emergency funds made available by it to protect the nation’s banking system from the negative impact of Friday’s massive earthquake.

Japanese authorities admitted that the unusual step to drop water from twin-rotor CH-47 helicopters to cool overheating pool containing spent fuel rods would not resolve the multifarious problems confronting them. These rods are still radioactive and as dangerous as the rods inside the reactors.

"It’s not so simple that everything will be resolved by pouring in water. What we are trying to do is to avert other problems, said Edano.

India’s top diplomat in Tokyo said all Indian nationals in Japan are safe and that efforts are underway to facilitate the return of those wishing to leave the quake-ravaged region.

A group of Indians stranded in Sendai, one of the worst- affected in the quake and the devastating tsunami, have been moved to Tokyo, Indian Ambassador Alok Prasad said.

He said the Indian mission has set up a 24-hour helpline and has been giving regular updates on its website.

Reflecting the mounting international concerns, France has asked its nationals in Tokyo to leave the country or move south.

View article…


>Black Swans Now a Regular Part of Market Landscape


CNBC.com Article: Black Swans Now a Regular Part of Market Landscape

For global financial markets, once-in-a-lifetime events are happening with such regularity that black swans may as well be white swans.

Full Story:


>Japan Update: It’s Much Worse than it Looks


Japan Update: It’s Much Worse than it Looks
zero hedge – on a long enough timeline, the survival rate for everyone drops to zero
March 15, 2011 17:00: CET

I just got off the phone with several frightened, somewhat dazed survivors of the Japanese earthquake who work in the financial markets, and I thought it important to immediately pass on what they said. Some were clearly terrified.

Japan’s economic outlook now appears far more dire than I anticipated only a day ago. It looks like GDP growth rate is going to instantly flip from +2% to -3%, a swing of -5%, similar to what we saw after the Kobe earthquake in 1995.  We have just had a “V” shaped economy dumped in our laps, and we have just embarked on a precipitous down leg. Two very weak quarters will be followed by two strong ones. The initial damage estimate is $60-$120 billion, and that will certainly rise.

Kobe had a larger immediate impact because of its key location as a choke point for the country’s rail and road transportation networks and ports. But the Sendai quake has affected a far larger area. Magnifying the impact is the partial melt down at the Fukushima Dai Ichi nuclear power plant, forcing the evacuation of everyone within a 12 mile radius.

Most major companies, including Toyota, Nissan, Honda, and Sony have shut down all domestic production. Management want to tally death tolls, damage to plant and equipment, and conduct emergency safety reviews. In any case, most employees are unable to get to work because of the complete shutdown of the rail system. Tokyo’s subway system is closed, stranding 25 million residents there.

Electric power shortages are a huge problem. The country’s eight Northern prefectures are now subject to three hour daily black outs and power rationing, including Tokyo. That has closed all manufacturing activity in the most economically vital part of the country.

Panic buying has emptied out every store in the major cities of all food and bottled water. Gas stations were cleaned out of all supplies and reserves, since much of Japan’s refining capacity has been closed. There are 20,000 expatriates waiting at Tokyo’s Narita airport as foreign companies evacuate staff to nearby financial centers in Hong Kong and Singapore. Airlines are diverting aircraft and laying on extra flights to accommodate the traffic.

The Tokyo Stock Exchange absolutely took it on the nose on Monday morning. Trading lasted exactly four minutes until, with the TOPIX Index down 7%, the circuit breakers kicked in. Most lead blue chips were down 10%, and 175 stocks never opened. Only construction stocks were up. Most of the selling was being done by foreign institutions and hedge funds, locals having vacated this market ages ago. This could be the beginning of a new bear market that will last for many months.

Prime Minister Naoko Kan has asked the Bank of Japan “to save the country.” The central bank responded promptly with ¥15 trillion, or $187 billion worth of credit market purchases. The yen spiked at the opening, as I expected, to ¥81.4, as carry trades were unwound en masse. Then the BOJ showed its heavy hand, slapping it back down to ¥82.2 where it has sat since. They appear to be taking on all comers at this price, and have the printing presses to fall back on. The situation remains fluid.

My global macro call proved spot on. Oil is down $2, plunging to a two week low below $100/barrel, blindsided by shrinking Japanese demand. Equities were sold worldwide. Uranium miners in Australia took a particular pounding, as the nuclear crisis casts a long shadow over this reviving energy source. Insurers were unloaded in London and Zurich. The S&P 500 opened down 10 points to 1,295 in the futures markets, close to Friday’s low.

It looks like we are seeing the first multiple partial nuclear melt downs in history. But a professor at nearby UC Berkeley tells me this is more of repeat of Three Mile Island, where half the fuel rods melted, than Chernobyl, where they all did. Small amounts of low radiation cesium and iodine have already been released, which should be measurable on American roof tops in about ten days. Neighboring countries are enforcing radiation testing of all food imports from Japan.

The death toll is certain to ratchet up considerably. Seaside villages that have been wiped off the face of the earth don’t return phone calls. Japan’s maritime self-defense forces are scouring the seas off of Sendai, rescuing a lucky few clinging to floating debris.

Finally, I wish to thank the many who sent me emails of concern, aware of my long family ties to Japan. Everyone is safe as they were fortunately out of the country when the disaster struck, or did not live in the worst affected areas.

Further updates to follow.

To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.

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>Markets update from the FT: Risky assets dumped as Japan crisis intensifies


March 15 2011 4:37 PM GMT
Risky assets dumped as Japan crisis intensifies

ByFT reporters

Markets are enduring a turbulent session as the worsening nuclear crisis in Japan sees traders frantically dump riskier assets and push funds into the haven of US Treasuries

Read the full article at: http://www.ft.com/cms/s/0/54742224-4dee-11e0-85e4-00144feab49a.html?ftcamp=rss

>Japan and precious metals: a snapshot – SILVER NEWS | Mineweb

>Japan and precious metals: a snapshot

As the country still reels from the devastation of a massive earthquake and tsunami, we provide a brief view of where Japan fits into the world precious metals markets

Author: Rhona O’Connell
Posted: Monday , 14 Mar 2011


It feels callous writing about such an awful tragedy in terms metals markets, but sadly there is perhaps a call for a quick review of Japan’s typical position in terms of normal demand levels. This piece is not designed to take a view on the prospects for longer-term increased demand in terms of reconstruction, not to try and quantify how demand may contract in the short-term as some of Japan’s industries have to struggle to contain their losses or temporary shut-downs; it is aimed more at giving a snapshot of Japan’s market share in different sectors.

The PGMs

The platinum group metals are the logical place to start, especially given Japan’s long history of platinum jewellery demand. This is based partly, but not only on the concept of purity. Platinum jewellery needs to be a minimum of 85% and there is no ‘caratage’ concept as such; this partly informs the fact that for many decades Japan was the world’s largest consumer of platinum in jewellery as Japanese people have high standards and have always valued high purity (this though has been changing in the gold market through economic force of circumstances). The other reason goes back some centuries to the Shogun era, when the Emperor desired his merchants to wear while metal rather than yellow, in an effort to minimise ostentation – this was more important than the generally accepted concept of white metal looking better on the Japanese complexion than yellow metal.

Back in 1991, purchases of platinum for jewellery manufacture in Japan were 1.26 million ounces or 39 tonnnes (Johnson Matthey figures). This was some 31% of world demand for platinum in all forms and 85% of the world jewellery sector, which was 4.1M ounces or 252t.

Preliminary JM figures for 2010 put world purchases of platinum for jewellery at 2.4M ounces or 149t. This of course is now dominated by China; the Japanese figure for 2010 is just 330,000 ounces, a fall of 74% from 20 years previously. GFMS is currently estimating actual Japanese fabrication demand in the sector at a lower figure and has noted recently, but before the earthquake, that while the bridal sector remained relatively steady, falls in adornment demand were likely to continue. This is ascribed both to slow economic growth and demographic shifts in spending patterns as well as other endemic changes in the local sector.

JM figures suggest that Japanese demand for platinum in the auto sector accounted for just over half a million ounces in 2010 or 18% of the world total, but the Japanese auto market is a palladium story rather than platinum.

Johnson Matthey’s estimate (which, as noted above, reflects purchases of metal for the sector as opposed to actual fabrication demand) for the overall Japanese share in the platinum market in 2010 is 1.2M ounces, or 15% of the world total. Autocatalyst and jewellery, as the two largest demand sectors, took up 75% of local purchases, with glass in third place.

Japan’s position in the palladium market is slightly larger than that of platinum, reflecting its greater use in the auto and electronics sectors. JM estimates that Japan’s overall demand for palladium in 2010 was 1.5M ounces or 16% of the world total.

More than 50% of this was accounted for by the auto sector, at 765,000 ounces. Japan’s share of palladium demand in the world auto sector was therefore 15%.

Globally, the second largest use of palladium is the electrical and electronics sector, notably the latter. This sector took up 1.4M ounces in 2010, or 16% of world demand. In Japan the offtake was 295,000 ounces, giving it a 21% share, well ahead of Europe and the United States and second only to China.

Meanwhile Japan‘s demand for palladium in the dental sector is the world’s largest at almost 47% of the total.


A fully up-to-date breakdown of silver demand by country is not yet available (GFMS will be publishing its World Silver Survey for the Silver Institute in early April). Broadly speaking, however, Japanese demand for silver is something over 2,000 tonnes, or 9% of world total. The largest end-use by far is the broad ‘industrial’ category, which includes the auto sector, construction, medical uses and solar cells, which latter are garnering an increasing amount of popular comment. The photographic sector has been falling as heavily in Japan as it has elsewhere in the face of the onward march of digital technology; the fall in Japanese demand between 2000 and 2009 was 63%, while world usage fell by 62%. Jewellery and silverware is a minimal end-use in Japan.


In the gold market, meanwhile, Japan’s share of world gold fabrication (i.e. exclusive of investment demand) is approximately 6% of the world total, with the majority of this concentrated in the electronics industry in which it has consistently been the world leader. The tonnage involved in Japan is close to 100t for a world total in the region of 250t. Jewellery demand is low, both on a gross and an outright basis, and scrap recycling has been relatively heavy in recent years, meaning that net demand has typically been well below 50% of gross demand – and more recently has been more like 20% of total. Caratage in new pieces has been falling as economic conditions have been constricting expenditure.

Gold investment bars, meanwhile, have been flowing back into the market. World Gold Council publication ‘Gold Demand Trends’ (figures compiled by GFMS) show that with the exception of the fourth quarter of 2008, Japanese investors have been net sellers of gold bars on a quarterly basis right back to the start of 2006, since when the net release of small bars has been over 220 tonnes. This negates the net purchases of gold bars going back to the second quarter of 2002. Between the start of 1999 and Q2 21002, net purchases were almost 300t – so we may yet find that these sorry circumstances lead to more such sales.

Mineweb.com – The world’s premier mining and mining investment website Japan and precious metals: a snapshot – SILVER NEWS | Mineweb

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>U.S. Commodities: Oil Falls After Japan Quake Shuts Refineries


U.S. Commodities: Oil Falls After Japan Quake Shuts Refineries

Crude oil fell, capping the first weekly drop in a month, after Japan’s strongest earthquake on record shut refineries and dissidents in Saudi Arabia failed to stage planned protests.

The 8.9-magnitude temblor unleashed a 7-meter (23-foot) tsunami that killed hundreds of people in Japan, the world’s third-largest oil-consuming country. Saudi Arabian police and anti-riot vehicles patrolled central Riyadh today, preventing a “Day of Rage” proclaimed by activists.

“This is in response to the tsunami and the lack of the Day of Rage in Saudi Arabia,” said Hamza Khan, an analyst at the Schork Group Inc., a consulting company in Villanova, Pennsylvania. “If the Japanese refineries are down, then we’re going to see lower demand for crude oil.”

In other markets, grains after Japan, a major importer of U.S. crops, was struck by the quake, threatening to curb demand. Cocoa also dropped. The UBS Bloomberg Constant Maturity Commodity Index fell 0.7 percent to 1,723.48, This week, the gauge declined 3.9 percent, the most since May. The measure was down for the fifth straight day, the longest slump since August.

Oil futures for April delivery tumbled $1.54, or 1.5 percent, to $101.16 a barrel on the New York Mercantile Exchange, the lowest settlement since March 1. The price declined 3.1 percent this week.

Futures still have gained 21 percent since Oct 1. A civil war in Libya, a member of the Organization of Petroleum Countries, and turmoil in northern Africa and the Middle East has roiled markets. President Barack Obama said today that he is prepared to release oil the U.S. Strategic Petroleum Reserve if fuel supplies tighten and cost jump.

Corn, Wheat

Corn futures for May delivery fell 18.5 cents, or 2.7 percent, to $6.6425 a bushel on the Chicago Board of Trade. Earlier, the price touched $6.5275, the lowest for a most-active contract since Jan. 31.

Japan, the largest buyer of U.S. corn, is checking ports and grain depots for damage after a tsunami that engulfed towns on the northern coast, the Ministry of Agriculture, Forestry and Fisheries said. Farmland was flooded with burning debris in some areas as the tidal surge swept inland, images from state broadcaster NHK showed.

The quake “will likely impact grain trade” after ports in Kushiro, Hachinohe, Ishinomaki and Kashima were hit by the tsunami, and some feed mills and livestock operations were hurt, the U.S. Grains Council said.

‘Economic Shock’

“There is no way to assess even the direct damage to Japan’s economy, or to the global economy,” Carl B. Weinberg, the chief economist at Valhalla, New York-based High Frequency Economics Ltd., said in a note to clients. “Experience tells us that the economic shock can be, and likely will be, much bigger than anyone can imagine.”

Japan is the second-biggest buyer of U.S. wheat and rice and ranks third for soybeans, government data show. Last month, grain prices surged to the highest since 2008 as rising demand and adverse weather cut inventories.

Wheat futures for May delivery dropped 21.75 cents, or 2.9 percent, to $7.1875 a bushel. Earlier, the price touched $7.0375, the lowest since Dec. 1. This week, the grain plunged 14 percent, the most since December 2008.

Soybean futures for May delivery dropped 21 cents, or 1.5 percent, to $13.345 a bushel. This week, the price fell 5.6 percent, the most since October.

Rice futures for May delivery fell 4 cents, or 0.3 percent, to $13.01 per 100 pounds. Earlier, the price touched $12.48, the lowest since Oct. 6. This week, the commodity tumbled 8.3 percent, the most since January 2009.


Cocoa fell, capping the biggest weekly drop since May, on speculation that supplies from Ivory Coast, the world’s biggest exporter, will increase after the government threatened to seize undeclared inventories.

Ivorian exporters have until March 31 to ship bean stockpiles or face “sanctions,” a spokesman for President Laurent Gbagbo said March 9. Gbagbo has refused to step down following a November election that international observers say was won by Alassane Ouattara, who has asked shippers to hold back exports to deny funds to his rival.

“The market is realizing there is still a lot of supply, as the situation in Ivory Coast is forcing suppliers to export in order to pay the domestic tax,” said Jonathan Bouchet, an analyst at OTCex Group, a broker in Geneva.

Cocoa for May delivery fell $33, or 1 percent, to $3,412 a metric ton on ICE Futures U.S. in New York. Prices dropped 6.7 percent this week, the most since May 14.

Commodities settled as follows:

Precious metals: April gold up $9.30 to $1,421.80 an ounce May silver up 86.9 cents to $35.935 an ounce April platinum up $16.10 to $1,781.70 an ounce June palladium down 90 cents to $765.50 an ounce

Livestock: June live cattle unchanged at $1.1695 a pound August feeder cattle up 0.35 cents to $1.37625 a pound June lean hogs down 1.95 cents to 99.5 cents a pound

Grains: May soybeans down 21 cents to $13.345 a bushel May corn down 18.5 cents to $6.6425 a bushel May wheat down 21.75 cents to $7.1875 a bushel May rice down 4 cents to $13.01 per 100 pounds May oats down 5.5 cents to $3.505 a bushel

Food and Fiber: May coffee down 6.15 cents to $2.744 a pound May cocoa down $33 to $3,412 a metric ton May cotton up 3.96 cents to $2.0494 a pound May sugar up 0.15 cent to 28.86 cents a pound May orange juice down 2.3 cents to $1.6795 a pound

Energy: April crude oil down $1.54 to $101.16 a barrel April natural gas up 5.9 cents to $3.889 per million British thermal units April heating oil down 1.59 cents to $3.029 a gallon April gasoline down 3.19 cents to $2.9877 a gallon

Others: May copper up 1 cent to $4.2075 a pound May lumber up $2 to $311.10 per 1,000 board feet

To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

U.S. Commodities: Oil Falls After Japan Quake Shuts Refineries – Bloomberg

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