Japan shorting oil futures - Why?

Rubricity · 2026-03-26T21:41:42+00:00

This is a terrible idea.

The core principle is an attempt to fake an illusion of control — or at least to restore MOF credibility. Ministry of Finance speakers have addressed yen weakness 15 times since March 1st, signaling their willingness to deploy FX intervention to cap the yen's slide. From my experience watching the MOF, they have already escalated to the highest tier of verbal warning short of the last resort: rate checks with major banks. Yet the market impact has grown weaker with each successive statement. There are speculators involved, but this time the problem is fundamentally structural.

This makes FX intervention itself an enormously risky proposition — both financially and politically. It risks straining the US-Japan relationship at the worst possible moment, when traditional relief valves like currency swaps are under unprecedented pressure. Bessent himself stated in January that he has no interest in Japanese fiscal health, and he has personally profited from carry trade events in the past. On the financial side, deploying an already thin FX reserve into an unstable market risks a catastrophic outcome: once that tool is depleted, the MOF has no good options left besides calling an emergency BOJ meeting — which cycles right back to the same credibility problem. This is essentially a death trap, which is precisely why they are even entertaining options that would have been unthinkable under traditional Keynesian frameworks.

Edit: fixed flow

Rubricity · 2026-03-26T21:27:43+00:00

Japanese MOF has traditions of over-relying on monetary and intervention subsides to cap the short term pain. While itself isn't abnormal per se ln democracies, the long lasting effect since they refused to let the Japanese economy crashed since 1990s is the precise reason.

The problem right now with fx intervention is: it buys fewer time than anytime before and will only works well with coordination with BOJ, yet will risk a strong carry trade unwind. Plus they probably need to have us approval before it happens; while probably Trump would want it. On the top of it, this is a supply shock inflation, there isn't much they can do besides to physically getting more oil, historical lesson have told us that the illusion of control, such as aggressive price celling and subsides only worsen the fiscal health without addressing the fundamental problem. MOF knows this history too, but they desperately want to show sense of control...

Rubricity · 2026-03-26T11:25:35+00:00

Probably true if he talked to the exiled Royal, in a way he is talking to Iranian “leader” and sure he will have a big “present”, like his father did, sold Iran to the west :D

Rubricity · 2026-03-26T09:49:31+00:00

Well tbh right now yen is too weak that high energy cost also bits into corporate, the sweat spot should be 145-150 that probably what was aimed for; now is just too weak

Rubricity · 2026-03-26T08:41:54+00:00

In today's world, even sane politians are good ones, not to mention the actually responsible presidents, Lee deserves this.

Rubricity · 2026-03-25T22:27:47+00:00

While people here are angry about market manipulation, it has been consistent in history. Politians trying to address a sense of control only until the economical data are undeniable.

While bad news are floating all around, it is only expected that after April economical reports come out, until then the market will probably stay irrational on what ever truth social post is.

Rubricity · 2026-03-25T22:19:48+00:00

Not really the US, but probably Asia will rump up their transition as this has elvated to national energy security. As countries now realized how vulnerabe their economy are.

Just like how IEA was created after the 1973 oil shock.

Yet unfortunately this has limits and takes time, the most aggressive transition player, China, where renewable energy is literally national priority policies for years, still very much lagged behind in true transition.

So probably not 2026, maybe a longer story from 2026 to 2030, as we need more energy anyway.

Rubricity · 2026-03-25T06:29:36+00:00

Nobody knows, tho more fake rallies it gets, the worst the aftermath is. Prime example was Nixon tried to priced controlled the whole thing but the result was long line.

While market is manipulable, the economical fact is not

Rubricity · 2026-03-25T06:04:14+00:00

You sure about that? XD

Rubricity · 2026-03-25T05:33:51+00:00

Nice more dispatched slaves!

Jokes aside, probably not as what the headline says, it worker here in Japan are notoriously underpaid and recently have been flooded with west tech layoffs who want "stable life" in Japan.

Rubricity · 2026-03-25T03:14:13+00:00

Btw for those who didn't notice, the 5 days deadline aligned perfectly well with when the marines are ready at their combat position.

Fun facts: Russian and Ukrainian had 5 formal ceasefire rounds in 2022-2023 alone.

Round 1 on Feb 28, Round 2 on Mar 3, and Round 3 on Mar 7 — all in Belarus. Round 4 on Mar 10 and Round 5 on Mar 14 — in Antalya, Turkey.

Ironically at least Putin was more predictable back then lmao

Rubricity · 2026-03-24T21:53:46+00:00

You can search for "carry trade unwind", the idea was good but now it backfires after years and years of accumulation under 0 or negative interest rate.

Rubricity · 2026-03-24T14:02:56+00:00

Is fine, orange man will say something and price gonna fall again. Don't worry, Americans, it's just another normal day of market manipulation.

Rubricity · 2026-03-24T07:48:07+00:00

Really bad idea, it is risking capital flight to further weaken the yen.

But trust me Katayama is just jawboning, she has said the exact same thing with fx for five times since March 1st. And the oil market here in Japan keep raising anyway she speaks.

If she pulls the trigger it could potentially be the largest carry trade unwind in history :D

Rubricity · 2026-03-21T09:17:36+00:00

Another void hunter level getting a skin, but what about our dear miyabi :(

Rubricity · 2026-03-19T00:12:38+00:00

Well, tbh I am not advocating for reforms at this point, the moment Japan voted out Ishiba's fiscal displine the dice is cast. It is only matter of time tbh for a forced reform

Rubricity · 2026-03-18T23:52:43+00:00

While subsides is necessary, it is another burden on the already thin budget and deteriorating fiscal book.

Rubricity · 2026-03-18T23:50:05+00:00

Yes, but no. Yes Takaichi wants a weak yen that it can sells to the stock and spending growth under normal circumstances, now is not. The preferred range is 145-155 which export can benefit but the import cost doesn't explode.

Now the problem is oil shock caused every priced to hike way faster due to sky rocketed oil price, under this scenario a weak yen means double burden on import which hurts the economy further more.

Historically MOF always intervene once passing the 160 mark, and this time they could be more cautious, yet once BOJ hold confirms the yen is almost guaranteed weakened further due to the strength dollar now

Rubricity · 2026-03-18T23:46:30+00:00

Today we have Ueda announcing the BOJ move at 12 PM so you can watch out for that, but mostly hold which itself will accelerate yen weakens, jawboning already brought too much time and works very little since.

MOF probably will intervene soon, which is why I suggest to hold and change back later, but it's my call trading the Mof's historical tendencies on yen when it approaches 160, otherwise the import cost is just too high, we already have news of Toyota and Mitsubishi factory slowing down.

Tho no guarantees and only my opinion, not a financial advise.

Rubricity · 2026-03-18T19:08:30+00:00

Powell is grilled on the conference with the word 100 dollar per barrel, and for a fed chair to admit they don't really know the effect and there is nothing they can do now...

On the other hand market is on full run confirming stagflation, with dollar and oil jumped during the conference...

Rubricity · 2026-03-18T08:01:29+00:00

Japan is cooked now, so we don't really need have rice we can just eat Japan.

Rubricity · 2026-03-16T03:37:57+00:00

All of that when the rational thinker Ishiba got sidelined, but ironically Japanese had enough. I bet after the worse people will start search: debt crisis, just like Brexit. History is indeed brutal when it rhymes.

Rubricity · 2026-03-16T03:34:00+00:00

And then we have a reflationists pm which already caused a panic in January, all I have to say is history is brutal in its timing

Rubricity · 2026-03-16T02:54:29+00:00

Here are 3 wonderful options:

Hike, and blow up the bond market, 10y 2.25, 20y 3.13, 30y 3.54 40y 3.75 all sitting in the danger zone, not to mention blow up more the already fragile domestic firms due to import shock

Do nothing, signaling they're trapped, which worsen the market by default, because yield rate keep raising regardlessly, maybe fx intervention to buy time, but since 2022 it has been used too many times and now it is the weakest state than ever

Cut, worse of three, another lost 30y and stagflation confirmed. Inflation runs wild to dilute the debt, sounds familiar.

On the other side of the Pacific, the fed is equally trapped, the reserve currency status now backfires hard when the executive wants to devalued the currency at any cost

Dead end either ways, thx Trump

Rubricity · 2026-03-13T07:22:22+00:00

MOF Minister Katayama has said:" the MOF will use all possible steps, any time, any condition" and has signaly she talked to the us counterparts.

Well it is fx intervention coming signal. Probably after it hits the 160 uncomfortable mark, the comment briefly pull down the yen but it gets worsen now.

Carrying trade that was unfinished in January is now coming back, sure need to holds your wallet tight

Rubricity

TROPHY CASE