Dollar Slide Drives Budget as Japan Shuns Treasuries

[Bullitt]

A rise in inflationary expectations is one and such fears are less likely to pick up in Japan than almost anywhere. Another is the need to reverse quantitative easing. But the Bank of Japan, unlike the Bank of England and the Federal Reserve, has no mass of bonds on its balance sheet that must be sold.

FT UK

Ah-ha, but that doesn't mean they won't ever sell our treasuries. 30-year T Note under pressure...

 

[robo]

Saturday, May 10, 2008
Is The Dollar Ready For Another Leg Down?


Above is a daily chart of the U.S. Dollar and in the lower pane is the stochastic oscillator.

Notice how every time the stochastics moved above 80 and then turned back down below 80, the Dollar would have a significant sell off. This happened many times over the past 2 1/2 years.

Right now the oscillator is above 80 which sets the dollar up for a potential short so keep an eye on the dollar this coming week.

http://kevinsmarketblog.blogspot.com/

 

[Silverbird]

April 28 (Bloomberg) -- Add another ailment to the U.S. misery index of soaring gasoline and wheat costs and falling home values: a federal deficit that is burgeoning as foreign investors led by the Japanese recoil from the slumping dollar.

The Japanese, who own $586.6 billion, or 12 percent of U.S. government debt, had their worst quarter in Treasuries this decade, losing 7 percent in the first three months of the year as the dollar fell to the lowest since 1995 versus the yen, Merrill Lynch & Co. indexes show. Dai-ichi Mutual Life Insurance Co., Meiji Yasuda Life Insurance Co. and Sumitomo Life Insurance Co., three of the nation's four-biggest insurers, would rather accept the world's lowest bond yields in Japan than buy U.S. debt.....

America relies on foreign investors, who own more than half the U.S. government debt outstanding, to finance a deficit that New York-based Goldman Sachs Group Inc. predicts will expand to a record $500 billion for the year ending Sept. 30, after a $163 billion gap last year. Without their support, long-term interest rates would be 0.9 percentage point higher, a 2006 Federal Reserve study found......
http://www.bloomberg.com/apps/news?pid=20601109&sid=adQ8ReGYJ.D8&refer=home