Current Thoughts and Ideas

[Rintel]

Happy Hols everyone.

Below is an excerpt of a note by mi2 partners with my idea at the end.

BoJ Trims April JGB Buying Operations

The Bank of Japan announced its JGB buying operation schedule for April on Wednesday. The new plan calls for only one

buying operation for JGBs with maturities longer than ten years during the month, down from two operations during March.

In addition, the BoJ will cut the number of operations in the 5-year to 10-year maturity range from five to four and will pur-

chase ¥450 billion in each operation.

 

The BoJ is cutting back on its JGB purchases to make it easier for long-term rates to rise. At its last meeting earlier this month,

the Monetary Policy Board approved a wider trading band of 25 basis points on either side of zero percent for 10-year JGBs.

The yield on the benchmark 10-year JGB rose to 0.120% following the announcement.

 

Production Index Falls 2.1% as Semiconductor Shortage Bites

The Mining and Manufacturing Production Index for February fell 2.1% from January at 95.7. The decline in production re-

flects production cuts at automakers due to the shortage of semiconductors used in automobiles.

Eleven of the fifteen sectors in the survey showed slower production, partly due to the lack of semiconductors and partly be-

cause of supply chain disruptions caused by a large aftershock to the 2011 Tohoku Earthquake during the month.

The outlook is for continued weakness in March as the fire at the Renesas Semiconductor Manufacturing plant will make the supply of semiconductors still tighter with no relief in sight. Companies are also worried that a new spike in COVID cases may cause fresh supply chain disruptions during the spring.

 

Nissan Motors (7201) Develops Cobalt-Free EV Battery

Nissan Motors said it is developing a cobalt-free electric vehicle (EV) battery that should go into mass production around 2025. Current EV batteries use cobalt in the battery’s cathode. Cobalt is a rare metal that is largely supplied by the Democratic Republic of the Congo, which is an unreliable source of such an important strategic material. Nissan has replaced cobalt in the battery cathode with manganese. Along with other changes to the battery architecture, the company has managed to eliminate cobalt from its batteries entirely.

Chinese companies have been developing cobalt-free batteries for some time. However, they have a big disadvantage in that they discharge much faster than traditional EV batteries which means the range of an electric vehicle using cobalt-free batteries is too short to be practical. Nissan says it has solved this problem and that its cobalt-free batteries have the same range as EV batteries now in use. By eliminating cobalt, Nissan says it can cut the cost of an EV battery from the current US$150/kwh to less than US$100/kwh by 2030.

Comment: There is a lot of R&D going on in improving battery technology. You never know where the next big breakthrough

will come from.

Seeing as semi conductor shortage looks like it will be here for a while, I have compiled 5 of the top10 holdings in the smh etf to take advantage of the shortage one could add small amounts of these to the portfolio if we ever get a pull back whilst shortages remain. Or should we get dollar strength.

Trading ranges are highlighted on the charts. Will be modelling future trading ranges and posting them here in the coming days.

God Bless you with the grind