This morning Josh sent me a note, as follows:

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" Bill, Did you see the Japan # within the TIC data? It sold a net $16.6 billion of U.S. Treasuries in January, its largest sale ever. Since Japan is the largest holder of treasuries, that can't be a good sign for either bonds or the USD. Your thoughts? /Josh"

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Let's have a look at the charts below.

I think we can pinpoint to the day in the 3rd week of January that BoJ started to offload U.S. Bonds. They probably did the same thing at the beginning of March, and back at the beginning of last September too.

Oh to be a fly on the wall at the BoJ.

Do you see that whenever the USD gets too weak against the Yen (the numbers are inverted: a 114 Yen to the USD is a stronger Yen than a 120 Yen to the USD), which is like saying that every time the Yen gets too strong for the BoJ, they take action to weaken it. They sell U.S. Bonds, and buy USD.

Why? Because they want Japanese exporters to have an easier time selling their goods. A stronger USD helps.

Japan is a major exporter of finished goods (like autos, consumer electronics, etc) to the USA and China. Too strong a Yen scares away the foreign purchasing agents.

Here is an interactive chart of the bonds, yields and USD:JPY trading.

Thanks Josh. I hope that other readers can pinpoint these major events in capital markets. The more you send me, the more I intend to publish. And that helps everybody who comes to this site.