Welcome to our first (and last?) RORSCHACH TEST OF THE DAY. Let’s get right to it.Japanese Government Bonds are seeing lower yields, and the yen is rallying, following the victory of the anti-stimulus PM last night.
What’s the reason for the market action?
A) Investors feel better about Japan’s fiscal situation with a PM who’s for less spending.
B) Investors are more dour about Japan’s growth prospects with a PM who’s for less spending, and thus are buying bonds.
C) People who try to make assumptions based on one day’s price action are idiots.
Put your answer in the comments, and explain.