QE In Japan To Increase – U.S.A Next

Some tough new out of Japan here this evening for those fans of “money printing” and “easy money” policy. News flash – It’s not working.

With the current QE program in Japan currently 3X LARGER than that of the U.S Federal Reserve, the first 6 months “pump job” has most certainly stalled out ( ironically in May – as I suggested markets topped then ) then traded flat across the summer,  and now into the fall.

If you can believe it:

“The BOJ is likely to step up stimulus in the April-June quarter to support the economy after the levy rise, according to 20 of the economists surveyed.”

“The BOJ will need to fire another arrow aimed at devaluing the yen if the Abe administration is unwilling to risk a sharp economic slowdown,” Credit Suisse Group AG economists Hiromichi Shirakawa and Takashi Shiono wrote in a report.

Expect lower stock prices in Nikkei, then further easing come April.

Now do some of you have a better idea as to why I expect the Fed to also INCREASE QE moving forward?? The numbers are just too large for any of us to clearly understand. A couple more “zero’s” on the Fed’s balance sheet aren’t going to make a single bit of difference as financial markets continue “hanging by a life line/thread”.

They will print, print, print until they can’t print anymore – and continue kicking the can hoping for a miracle.

Japan’s program is 3X larger than the U.S and it’s already “a given” they will increase QE with continued attempt to prop up the economy. This, in the face of “global growth projections” now being lowered by the IMF and anyone else with half a brain in their head.

I’ll say it again – keep your eyes peeled friends…..a bumpy road ahead.

The Domino Effect: What Japan’s QE Addiction Means for Global Currency Markets

USD/JPY: The Manipulated Cross That Reveals Everything

Let’s cut straight to the chase here – USD/JPY has become nothing more than a policy tool masquerading as a free-floating exchange rate. When Japan’s QE program dwarfs the Fed’s by a factor of three, you’re not looking at market forces anymore. You’re witnessing currency manipulation on an industrial scale. The yen’s artificial weakness isn’t some byproduct of their stimulus – it’s the entire point. Kuroda and the BOJ have turned their currency into a weapon for export competitiveness, and they’re not even trying to hide it anymore.

Here’s what the textbooks won’t tell you: when a central bank commits to unlimited bond purchases while simultaneously targeting a weaker currency, traditional technical analysis goes out the window. Support and resistance levels? Forget about them. The BOJ will step in at any level they deem “too strong” for the yen. This creates a one-way trade that savvy forex players have been riding for months, and it’s far from over. The April-June timeline mentioned by those economists isn’t speculation – it’s a roadmap.

The Fed’s Inevitable Response: Why QE4 Is Already Baked In

Think the Federal Reserve is going to sit back and watch Japan devalue their way to export dominance? Think again. The Fed’s dual mandate doesn’t explicitly mention currency strength, but you can bet your last dollar they’re watching USD/JPY charts just as closely as employment data. When your major trading partner is running QE at triple your pace, your relative currency strength becomes an economic headwind that no amount of domestic stimulus can overcome.

The mathematics here are brutal and unavoidable. Japan’s monetary base expansion makes the Fed’s balance sheet look conservative by comparison. This isn’t sustainable in a world where export competitiveness drives economic growth. The Fed will be forced to match Japan’s aggression or watch American manufacturers get priced out of global markets. It’s not a matter of if – it’s a matter of when. And when they do expand QE, expect the dollar to weaken across the board, not just against the yen.

EUR/USD, GBP/USD, AUD/USD – every major pair will feel the impact when the Fed capitulates to the reality of competitive devaluation. The central banks are locked in a race to the bottom, and none of them can afford to blink first.

Safe Haven Currencies: The Last Standing Dominoes

While Japan prints and the Fed prepares to follow suit, where does real money go? The traditional safe haven playbook is getting rewritten in real time. Swiss franc? The SNB already showed they’ll peg it to prevent appreciation. Norwegian krone? Oil dependency makes it too volatile for serious capital preservation. This leaves precious metals and a handful of currencies tied to economies that haven’t completely abandoned fiscal discipline.

The Canadian dollar presents an interesting case study here. With natural resources backing the currency and a central bank that’s been relatively restrained compared to their G7 peers, CAD crosses might offer the stability that traditional safe havens can no longer provide. But even this is temporary – commodity currencies are only as strong as global demand, and if the IMF’s growth downgrades prove accurate, even these refuges won’t hold.

Trading the New Reality: Position Sizing for Currency Wars

Here’s the hard truth that most forex education won’t teach you: traditional risk management models break down when central banks abandon pretense of market-driven exchange rates. When intervention becomes policy and policy becomes intervention, your position sizing needs to account for unlimited firepower on the other side of your trade.

The smart money isn’t trying to pick tops in USD/JPY anymore – they’re positioning for the Fed’s inevitable response and the chaos that follows. This means looking at currency baskets rather than individual pairs, hedging with hard assets, and maintaining flexibility to pivot when the next round of competitive devaluation begins.

The writing is on the wall, and it’s written in freshly printed yen, dollars, and euros. The central banks have chosen their path, and it leads straight through currency destruction toward an outcome none of them can control. Position accordingly, because this train has no brakes.