Central Bank Bureaucrats.

We spent a lot of time in our Overnight post talking about clarity and investors seeking it ahead of the Bank of Japan meeting today. Here are two reports from Reuters.

The Bank of Japan made an abrupt shift on Wednesday to targeting interest rates on government bonds to achieve its elusive inflation target, after years of massive money printing failed to jolt the economy out of decades-long stagnation.

While the BOJ reassured markets it would continue to buy large amounts of bonds and riskier assets, the policy reboot appeared to open the door for an eventual winding down of its huge asset purchases, and tried to repair some of the damage caused by its shock move to negative rates early this year.
"The impression is that the BOJ is starting to pull back some of its troops from the battlefront," said Katsutoshi Inadome, senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.
The BOJ's increasingly radical stimulus efforts are being closed watched by other global central banks which are also struggling to revive growth, such as the European Central Bank. Many investors fear central banks have nearly exhausted the limits of what monetary policy can do, putting pressure back on governments to step up spending.

Japan's Prime Minister Shinzo Abe welcomed the BOJ's shift and said the government would work with the central bank to boost his "Abenomics" economic growth program.

reuters.com/article/us-japan-economy-boj

Billionaire investor Daniel Loeb who runs  hedge fund Third Point had this view of the bank's changes., also from Reuters. Billionaire investor Daniel Loeb, whose Third Point has recently pushed for change at Japanese companies, on Wednesday said he approved of the Bank of Japan's monetary policy move but added corporate reform is still needed to help revive growth.

The central bank announced earlier on Wednesday it would target interest rates on government bonds and Loeb said the move will have "very positive implications for the market." Loeb, whose $16 billion Third Point has been investing in Japan for years, was speaking at the Reuters Newsmaker event featuring Prime Minister Shinzo Abe.

After making bets on Japanese companies ranging from Sony Corp , to robot maker Fanuc Corp and most recently retailer Seven & i Holdings Co Ltd , Loeb said foreign investors are being welcomed more now. Some large Japanese institutions agreed with his views, Loeb said, noting he has "allies" in Japan and "our interests are aligned."

But he also said the potential for increased government protection of small and medium-sized companies was misguided. "Let the market determine where workers’ labor is best allocated, let people who allocate capital determine that,” Loeb said.

reuters.com/article/us-japan-abe-loeb

So what does this all mean. We said before these two banks were set to meet that the market had started to do what central banks failed miserably to do, their jobs. The markets started to tighten.
It reminds of  Keat's famous poem, La Belle Dame Sans Merci.

                                      O what can ail thee, knight-at-arms,
                                            Alone and palely loitering?
                                                 The sedge has withered from the lake,
                                                        And no birds sing.

                                             O what can ail thee, knight-at-arms,
                                                     So haggard and so woe-begone?
                                                       The squirrel’s granary is full,
                                                           And the harvest’s done.

                                                 I see a lily on thy brow,
                                                     With anguish moist and fever-dew,
                                                       And on thy cheeks a fading rose
                                                          Fast withereth too.

Be careful what and whom you put your faith in, central bank bureaucrats notwithstanding.