Japan’s Nikkei Flash-Smashes 400 Points Higher In Milliseconds After Abenomics Gets Three-Year Extension

Whether it is due to thin holiday liquidity, due to the BOJ intervening just ahead of its usual time, because Japan’s “legendary” Twitter trader “CIS” just went bullish (again), because prime minister Abe just learned he would be reinstalled as head of his ruling LDP party because no challenger had emerged unleashing three more years of unchallenged Abenomics, because Japan’s Q2 GDP was just revised modestly higher (to a less negative number) or just because this is how the New Normal rolls, moments ago the Nikkei flash smashed higher some 400 points higher, in a well-choreographed algorithmic frenzy, to take out Friday’s high stops.

Perhaps this latest ridiculous move was predicated by the USDJPY momentum ignition which today came 30 minutes ahead of its usual time…

… or by some of the economic data is neither relevant nor worth digging into. In this “market” things just happen…

Speaking of the economic data, this is what Japan reported: instead of a -1.8% drop in Q2 GDP, Japan – like the US – revised the number higher to “only” -1.2% (versus the initial -1.6% report) with the real sequential decline of -0.3% fractionally better than -0.5%, even as nominal GDP posted the smallest possible sequential gain.

Additionally, Japan reported that its July Current Account balance was higher than the JPY1.732 trillion expected, and rose to JPY1.809 trillion, up from JPY 559 billion in June.

Perhaps the catalyst was the report that Prime Minister Shinzo Abe has returned as president of the ruling Liberal Democratic Party on Tuesday, as rival Seiko Noda failed to garner signatures of support from 20 LDP Diet members, a requirement to file a candidacy for the Sept. 20 election. According to the Japan Times  the deadline for filing the candidacy was set at 8:30 a.m. Tuesday, but Noda held a news conference to tell reporters that she gave up running prior to that the same day.

In other words, Abe’s new term as LDP president continues for another three years, which means his term as the prime minister will be extended for that period as well, assuming the increasingly jerky Nikkei – the only thing that has allowed Abe to keep his position as long he has – does not crash in the interim.