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Using tick-by-tick data for the dollar–yen and euro–dollar exchange rates recorded on the actual transaction platform, a ‘run’—continuous increases or decreases in deal prices for the past several ticks—does have some predictable information on the direction of the next price movement. Deal price movements, that are consistent with order flows, tend to continue a run once it is started. Indeed, conditional probabilities of a run continuing in the same direction after several consecutive observations exceed 0.5. However, quote prices do not show such a run tendency. Hence, a random walk hypothesis is refuted in a simple test of a run using tick-by-tick data. In addition, a longer continuous increase of the price tends to be followed by a larger reversal. The findings suggest that those market participants who have access to real-time, tick-by-tick transaction data may have an advantage in predicting exchange rate movements. The findings reported here also lend support to the momentum trading strategy. [ABSTRACT FROM AUTHOR]

Weak financial supervision was partly responsible for the Global Financial Crisis (GFC) of 2007–2009. The liquidity risk in the special purpose subsidiaries was not well recognized in regulation; there were large financial institutions that escaped rigorous supervision; and the concept of ‘too-big-to-fail’ caused moral hazard in management. This paper examines whether these shortcomings were adequately addressed in the post-crisis reform of the global financial architecture. The United States overhauled the supervision framework, which includes shifting supervision authorities of systemically important financial institutions (SIFIs) to the Federal Reserve and increasing capital requirement on those SIFIs. Similar reforms of supervision frameworks have been implemented in European countries. The Bank of International Settlements (BIS) also proposed Basle III, significantly increasing capital requirements, and modifying risk weights. Despite all these efforts, one key component on the reform agenda is not adequately addressed, namely the procedure to have an orderly resolution mechanism for a large financial institution. Without the procedure, the too-big-to-fail problem will continue to cast a shadow over the global financial architecture. [ABSTRACT FROM PUBLISHER]

Discusses how the Japanese government can beat deflation. Problems caused by deflation; Cause of the Japanese deflation; Fiscal and monetary policies that the government should apply.

[Poly(ethyleneglycol)]-modified hemoglobin vesicles (PEG-HbV), a type of encapsulated hemoglobin, have been developed as artificial oxygen carriers and it is important to evaluate their blood compatibility. We studied the effects of PEG-HbV on human polymorphonuclear neutrophils (PMNs) in vitro, focusing on the functional responses to N-formyl-methionyl-leucyl-phenylalanine (fMLP) as an agonist. The pretreatment of the PMNs with PEG-HbV up to a concentration of 60 mg/dl Hb did not affect the fMLP-triggered chemotactic activity. In parallel to these results, the fMLP-induced upregulation of CD11b(Mac-1) levels on the PEG-HbV-pretreated PMNs was comparable to that of untreated cells. Furthermore, the pretreatment of the PMNs with the PEG-HbV even at 600 mg/dl Hb did not affect the gelatinase B (Matrix methalloproteinase-9 (MMP-9)) release, suggesting that the fMLP-induced release of secondary and tertiary granules was normal. In addition, the fMLP-triggered superoxide production of the PMNs was unchanged by the pretreatment with the PEG-HbV at 600 mg/dl Hb. Thus, these results suggest that PEG-HbV, at the concentrations studied, have no aberrant effects on the fMLP-triggered functions of human PMNs. [ABSTRACT FROM AUTHOR]