Clues to the Origins And Stubbornness of the ‘Rising Dollar’

by Jeffrey P. Snider
Alhambra Partners

On March 9, 2016, front month trading for Japanese government bond (JGB) futures was halted at 12:32 pm Tokyo time. Selling had become intense, tripping the Osaka Exchange’s dynamic circuit breaker. The total length of the halt was just 30 seconds, but fingers were already being pointed in the direction of the BoJ.

More than four months later, on July 28, trading was halted in all products for JGB’s for an estimated 20 minutes starting 9:51 am Tokyo time. While the exchange provided very little information, they eventually blamed a delay in system processing. Whether or not that was the proximate cause doesn’t really matter, as the context for the trading darkness was just hours ahead of BoJ’s latest monetary policy decision.

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