ORLANDO, Florida, Nov 19 (Reuters) - Global stock

markets were generally calm on Wednesday and wider measures of

volatility eased as investors awaited U.S. chipmaker Nvidia's ( NVDA )

latest earnings, although selling pressure on Japan's currency

and bonds intensified further.

More on that below. In my column today I look at why the

Japanese yen has failed to live up to its "safe haven" status

amid the unfolding global equity selloff. Look no further than

Prime Minister Sanae Takaichi's plans to go large on fiscal

stimulus, and lean on the BOJ to keep rates as low as possible.

If you have more time to read, here are a few articles I

recommend to help you make sense of what happened in markets

today.

1. Blue Owl calls off private credit fund merger

after

market turmoil

2. Brookfield launches $100 billion AI

infrastructure

program with Nvidia ( NVDA )

3. Global funds fear AI investment indigestion: Mike

Dolan

4. What Fed cut? U.S. repo rates still high as

liquidity

tightens into year end

5. Japan policymakers agree to watch market with

"strong

sense of urgency", yen weakens

Today's Key Market Moves

* STOCKS: S&P 500 +0.4%, Nasdaq +0.6%. Japan's

Nikkei

falls for a fourth day.

* SHARES/SECTORS: U.S. tech +0.9%, energy -1.3%.

Lowe's

and Broadcom +4%, Nvidia ( NVDA ) +2.9%, Boeing -2%.

* FX: Dollar jumps 0.65%, best day in two months.

Yen

slumps to new historic lows. Bitcoin -4% below $90,000.

* BONDS: Treasuries becalmed. Not so JGBs - 10-year

yield

at new 17-year high of 1.775%, 20-year yield rises for 10th day

to highest this century at 2.815%.

* COMMODITIES/METALS: Oil -2%, Comex copper +1%.

Today's Talking Points

* Banking on one last push from Nvidia ( NVDA )

Chipmaking behemoth and artificial intelligence leader

Nvidia ( NVDA ) released Q3 results on Wednesday. Among the immediate

takeaways were record data center revenues of $51.2 billion in

Q3 and yet another bumper outlook for overall revenue in the

next three months of $65 billion, compared with analysts'

average estimate of $61.66 billion.

Will this be enough to halt the recent selloff in Nvidia ( NVDA ) and

tech stocks more broadly? Nvidia ( NVDA ) shares jumped as much as 4% in

extended trade on Wednesday, lifting other tech names. How long

that optimism lasts will go a long way to determining Wall

Street's fortunes between now and year end.

* U.S. growth running north of 4%?

As delayed U.S. economic data begins to trickle through

following the record 43-day government shutdown, the growth

picture will gradually become clearer. If the Atlanta Fed's

GDPNow model is any guide, the early signs are eye-opening.

This closely-watched model now shows annualized Q3 GDP

growth of 4.2%. Again, this is heavily caveated by the patchy

data flow - November's payrolls data will only come after the

Fed's next meeting and October's payrolls data will not be

released at all. But if it is remotely accurate, doesn't it

suggest the Fed should be raising rates, not cutting them?

* Wait a minute

Following on from that, minutes of the Fed's October 28-29

policy meeting released on Wednesday show just how divided

rate-setters are on the next step. Several opposed last month's

cut outright, and even some of those who voted for it would have

been happy to leave rates unchanged.

Markets reacted swiftly - the probability of a rate cut next

month fell to a new low around 30%, according to rates futures

pricing, and the dollar notched its best day in two months. The

December 9-10 Fed meeting could be historic - a record number of

dissents, anyone?

Japanese yen's safe-haven illusion shatters

Conditions are ripe for a strong rally in the "safe haven"

Japanese yen, with a global stock market selloff sparking

volatility across asset classes. But the Japanese currency is

falling fast, calling into question its long-perceived role as a

preferred hiding spot for spooked investors.

The yen this week has tumbled to a 10-month low against the

dollar and the weakest level ever against the euro. It has been,

by far, the worst-performing G10 currency in recent months,

raising the prospect of Japanese authorities intervening to lend

it some support.

Domestic issues are the key factor here. Japan's new Prime

Minister Sanae Takaichi appears to be taking notes from the

Donald Trump playbook: go large on fiscal stimulus and lean on

the central bank to keep interest rates as low as possible, even

if inflation is elevated.

Unsurprisingly, investors are in no rush to pile into the

yen despite the global market jitters.

The yen's status as a major safe-haven currency, which it

shares with the U.S. dollar and Swiss franc, is rooted in the

large current account surpluses and ultra-low or zero interest

rates that Japan ran for decades.

These conditions gave rise to the yen carry trade. Japanese

investors recycled the surpluses into higher-yielding assets

overseas, making Japan the world's largest creditor nation for

many years. At the end of June, Japan held a net $3.62 trillion

in overseas stocks and bonds, according to the International

Monetary Fund.

In previous bouts of global market turbulence, repatriation

of even a slender slice of that mountain of assets could deliver

a quick, outsized boost to the yen.

But that's not happening now. Perhaps the tremors roiling

global markets aren't strong enough yet. Or, to cite that

dreaded phrase, perhaps this time is different.

CARRY THAT WEIGHT

To put it bluntly, Japan's domestic policy stance is not

yen-friendly at all.

A ruling-party panel of lawmakers close to Takaichi has

proposed a supplementary budget exceeding 25 trillion yen ($161

billion) to fund Takaichi's planned stimulus package. That's

more than estimates floated recently and much larger than last

year's $92 billion plan.

Meanwhile, Takaichi has also indicated she would prefer the

Bank of Japan not to raise interest rates. Markets have reacted

accordingly. Japanese government bonds have tumbled, sending

yields to historic highs, and the swaps market indicates that

the probability of BOJ rate hikes in the coming months has

fallen sharply.

One might argue similar policy and political pressures are

prevalent in the United States, and should therefore be pushing

the dollar lower. That's fair, but these dynamics have been at

play for months, so are surely priced in by now. Takaichi has

been in power barely a month.

"The 'safe haven' status is challenging when so many of the

negative shocks are Japan-based," says Steven Englander, head of

G10 FX strategy at Standard Chartered. "The yen is super-low

yielding in real and nominal terms. It takes a lot to overcome

that."

FROM BOTH SIDES

The BOJ's tightening process was already slow and gradual.

It last raised its policy rate in January, doubling it to 0.5%,

meaning Japan's real interest rates adjusted for inflation are

still deeply negative. This is fertile ground for carry trades.

Exchange rates are obviously two-sided, so it is a cruel

twist for yen bulls that the BOJ could be slowing its tightening

process just as the Federal Reserve seems to be doing the same

with its easing plans. As the yen has been the worst-performing

G10 currency in the second half of the year, the dollar has been

the biggest gainer.

A deeper rout in U.S. and global markets in the coming weeks

could unwind some of these yen carry trades and restore the

Japanese currency's safe-haven allure.

On the other hand, with Japan's domestic policy mix being

what it is, maybe that will be more of a challenge this time

around.

What could move markets tomorrow?

* China interest rate decision

* Bank of Japan board member Junko Koeda speaks

* Bank of England's Catherine Mann and Swati Dhingra speak

* U.S. employment report (September)

* U.S. Philadelphia Fed index (November)

* U.S. Treasury auctions $19 billion of 10-year TIPS

* U.S. earnings - Walmart and Palo Alto Networks

* U.S. Federal Reserve officials scheduled to speak include

Cleveland Fed's Beth Hammack, Chicago Fed's Austan Goolsbee,

Governors Michael Barr, Lisa Cook, and Stephen Miran

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