[DcifrThs]

Interesting stuff going on in japan.

the japanese postal bank, since the 19th century, has been both a post office and deposit bank backed entirely by the govt (all deposits are guaranteed).

it just now got the go ahead to act as a private bank with the goal of going to market in a few years.

this means that much of the ~$1.6 trillion of deposits it currently holds will be redeployed in the form of more strategic/tactical investments and new loans.

this makes the japanese postal bank the largest bank in the world.

the japanese postal bank holds about 70% of its deposits in JGBs, which, i'd think, are now poised to fall precipitously as the postal bank holds 21% of the entire market for JGBs. the central bank is not likely to cut rates anytime soon (and is less liekly to do so since part of the reason for the privatizing move of the bank is to help revitalize the japanese economy) also.

depending on when and how the bank redeploys its assets, a few short positions in JGBs are probably a good idea.

further, japanese shares are probably going to benefit as a result of the sales as will some structured products and int'lly held shares and products.

any guesses where the bank will move these funds?

two trade ideas i can see from this are the short on the JGBs and a possibly short yen position (though fundamentals at this time still point to an appreciating yen imo).

thoughts?
Barron