Wang Nuo stayed up all night because he saw a possibility

Spending an evening reading through the materials, Wang Nuo felt more and more that this possibility was not small, but ...... He doesn't have much qualifications to operate.

Tuesday the 28th.

When they came to the company early in the morning and saw Wang Nuo with black eyes, Meng Han and Lu Jianming were shocked, but what was even more terrifying was to hear the inference that Wang Nuo talked about at night.

"How can the interbank interest rate be negative?" Meng Han almost collapsed.

LIBOR stands for London Interbank Offered Rate, which is simply understood as the lending rate between financial institutions, and the interbank interest rate for each currency is different, and even the interest rate will be different depending on the location of the account where the currency arrives.

Meng Han felt that what was terrifying was that Wang Nuo thought that if the yen had a negative interest rate, then there would be money to be made by borrowing yen, for example, with an interest rate of -01, borrowing 100 million yen, not only did not have to give money to the bank, but the bank would have to discount 10,000 yen a year.

It's funny, no financial institution would do that, but if the yen has a negative interest rate, it's something that can happen.

"Even if the interbank interest rate is negative, after the currency conversion, you should also consider the correction of the currency value, which will wipe out this exposure. Meng Han said.

"Even in today's market, borrowing yen and lending dollars is an carry trade, so I don't think it's strange. Lu Jianming pointed out this and said: "However, the spot exchange rate of the yen is bearish, and many people are doing this model." ”

The interest rate of the US dollar is now from 07 to 1 according to the length of time, and the yen is now almost 0, so the carry trade of financial institutions is to lend US dollars and borrow Japanese yen, and if both sides are carried out at the same time, assuming that the interest rate of the yen is zero, the institution will purely earn interest on US dollars.

The strange thing is that this operation is equivalent to borrowing yen and then exchanging yen for dollars to lend out, according to the simplest law, the yen is first borrowed indefinitely, and then indefinitely replaced, and the impact on the yen exchange rate seems to be offset by the coming and going.

But you can't look at things that way, you have to be able to borrow and lend at the same time, so you can lock in the income, and the revenue is locked in dollars, and there will be costs in the middle, and it is difficult for small institutions to get these things, and besides, ...... Is earning 1 a year earning?

For financial institutions, if the yield is lower than the inflation rate, they are actually losing money, and there is a certain time cost to lock in the return.

So there is also a cost in this, the cost of time, 100 million now and 100 million a year later, maybe which one is more "valuable".

In addition to the risk of the spot exchange rate, the carry trade also has to bear a certain risk of inflation rate.

To sum it up: the risks and benefits are actually about the same.

Borrowing back and forth requires costs such as labor and capital leverage, and the money is purely earned, but there are also costs, and it also depends on the strong platform channel support of the institution.

"The interest rate on Japanese yen government bonds will also be negative. Wang Nuo said: "If you lend dollars, borrow yen, and buy yen government bonds, it is possible to lock in income." ”

"Then it is the risk of a depreciation of the yen. Meng Han said simply: "If the negative interest rate comes out, the depreciation is expected to be great." ”

"That's what I'm trying to say, if I have enough dollars, the yen won't be able to depreciate!" Wang Nuo snapped his fingers, with a hint of excitement in his expression: "Lending dollars, borrowing yen, and buying yen treasury bonds are completely supporting the yen exchange rate......

"The low interest rate of the yen, the expectation of depreciation is large, and the expectation of the sell-off of yen assets is high, and this chain of operation can just wipe out the two expectations. Wang Nuo explained.

"Who would want to do this kind of operation? This is not a leveraged operation...... Meng Han first subconsciously vetoed it, and then was stunned.

Who will do this kind of operation? Who will slap Japan in the face? The answer is actually obvious: In society, the People's Bank of China is likely to intervene, and the major institutions in the international market do not mind pitting the yen.

As long as...... The negative interest rate figure of the yen government bond should not be greater than the stable profit of the carry trade.

In this way, I have been borrowing yen to ensure that the yen does not depreciate, and at the same time I have been making money, making dollars and yen, or exchanging dollar assets for yen assets, as long as there is an iron chain to manipulate the yen exchange rate, what is there to hesitate?

But what about doing that...... Japan is going to jump to the feet, Japan is definitely going to turn its face.

Besides, the biggest influencer of the yen exchange rate is the Japanese authorities, and if you hold yen assets, it is equivalent to choking Japan's throat and giving the other party a chance to break the net.

What if Japan insists on depreciating the yen? Thinking of this, Meng Han couldn't help but shudder, as long as its strength is strong enough, Japan will not even have a chance to devalue the yen.

If you dare to depreciate, I will dare to lift it.

Hehe, if Japan wants to die fast enough, let's go for appreciation, and besides, doesn't appreciation just increase the income from holding positions?

After a series of analyses, Meng Han's back was simply in a cold sweat, he never expected that Wang Nuo would stay up all night and come up with such a ...... Poison Scheme.

This is an attempt to suffocate the yen policy in the short country, but it still looks so complete, that is, to convince people with force.

Even if the yen government bonds are bought too much, and Japan has the money in its hands to build up the economy and make the yen recover, don't speculators know how to sell the yen government bonds and exchange them for other assets to go away?

At that time, the yen wanted to depreciate but could not depreciate, and wanted to improve the economy...... Liquidity is being held up.

I can't afford to break it, and the yen is not the dollar, and countries that can't even be politically independent, don't even think about discussing broken jars.

How bold and prolific people are, Wang Nuo's inference...... It seems that there is a possibility of success, but others have guessed it, right? Even Japan itself should know about it, and it seems that this kind of thing can be done now by convincing people with their own power, and the power is always in their own hands.

The current structure of the yen is the same as what Wang Nuo said, if Japan adopts a negative interest rate policy, their analysis conclusion must be: therefore, it will lead the yen into a depreciation channel, and the expanded arbitrage space is not enough for financial institutions to enter the market to bear this part of the risk.

In the end, it is a question of the ratio of risk and benefit, or ...... Plus other factors?

"No, the depreciation of the yen, will currency holders tend to exchange financial assets for real assets? Or do you want to lose a lot of money even if you lend money, but you are bearish on physical goods and firmly hold on to the currency, after all, Japan is in a state of long-term deflation...... Meng Han and Lu Jianming both have a derivation chain in their heads, but their core doubts are: will negative interest rates come.

As soon as negative interest rates come, whether the market will go as Wang Nuo guessed, there are really many doubts about it.

Wang Nuo is very calm, come or not, play differently, if a strong financial institution sees an opportunity, it is impossible to let it go, he expects negative interest rates to come, but not to come...... There's no loss.

The changes in the market are also unpredictable, Wang Nuo deduced only a possibility, and what he needs to do now is to wait for this possibility to appear.

Strictly speaking, this possibility is that the yen exchange rate may be manipulated by some financial institutions, provided that the market psychology.