**Weekly Commentary of the Week:
“Complacency in the Trump TACO and Takaichi Trades —
The Worst Policy Mix in an Era of Supply Shocks”
March 8, 2026 (Sun.)
Tomo Nakamaru
Former World Bank Economist
I. Introduction: The First Week of March 2026 — Complacency Hits the Markets
The world has already entered a negative chain reaction:
currency wars → trade wars → hegemonic wars → civilizational collapse.
This week’s markets showed that this chain has begun to accelerate again, driven by a series of supply shocks:
- Crude oil surge (WTI +35.6%)
- Global equity selloff
- Sharp rise in bond yields
- Continued yen depreciation
- Nikkei 225 futures nearly breaking below ¥54,000 at week’s end
These are not mere market fluctuations.
They are the inevitable consequence of complacency—continuing demand‑stimulus policies in an era defined by supply shocks.
II. The TACO Trade — The Complacency of “Trump Always Chickens Out”
The TACO trade refers to the U.S. negotiation style of:
“Shake the markets with a hardline stance, then concede at the final stage.”
The large‑scale U.S. attack on Iran this time is an extension of that pattern.
■ The Blind Spot
- Hardline stance → excessive market reaction
- Oil price spike → inflation reignites
- Ultimately rebounds back onto the U.S. itself
In other words, the complacency lies in the structural blind spot:
a hardline posture does not necessarily serve U.S. interests.
This week’s oil shock made that blind spot visible to the markets.
III. The Takaichi Trade — The Complacency of Abenomics 2.0
I position the Takaichi trade as a “double down” on Abenomics:
- Weak yen
- Rising stock prices
- Continuation of unconventional monetary easing
A replay of the same policy mix.
But this time, we are in the era of supply shocks:
- Crude oil surge
- Rising U.S. interest rates
- Heightened geopolitical risks
The moment these factors hit simultaneously, the Takaichi trade collapsed.
The symbol of that collapse was Nikkei 225 futures nearly breaking below ¥54,000.
IV. This Week’s Markets — Numbers That Reveal the Negative Chain Reaction
1. Equities: Global Selloff
| Index | Weekly Change |
|---|---|
| FTSE100 | –5.7% |
| Nikkei 225 | –5.5% |
| TOPIX | –5.6% |
| Dow Jones | –3.0% |
| S&P500 | –2.0% |
| NASDAQ | –1.2% |
| Shanghai Composite | +1.0% (the only positive) |
Currency and trade are two sides of the same coin, and distortions eventually hit equities.
This week was a textbook example.
2. Bonds: Yields Rise (Correlation Breakdown)
- U.S. 10-year: +0.20
- U.K. 10-year: +0.40
- Germany 10-year: +0.22
- Japan 10-year: +0.06
A highly unusual situation where yields rise even as equities fall.
This signals a renewed fear of inflation.
3. FX: Yen Weakness Continues
- USDJPY: 157.78 (+1.1%)
- GBPJPY: 211.63 (+0.6%)
These moves lie on the continuum of the ongoing currency wars.
The triple decline in equities, currency, and bonds may be an early sign of a full‑scale “Japan selloff.”
4. Commodities: Crude Oil Surge
WTI: +35.6%
This is not a simple supply‑demand issue.
It is a tri‑layered shock of geopolitics, hegemony, and currency.
V. Core of the Civilizational Argument:
Supply Shocks × Excessive Demand Stimulus × Return of Inflation
The key point is this:
COVID‑19 was a textbook supply shock.
- Stay‑at‑home orders
- Factory shutdowns
- Logistics disruptions
- Sharp decline in labor supply
- Supply chain collapse
Yet the U.S., Europe, and Japan responded with demand‑stimulus policies:
- Massive fiscal spending
- Zero or negative interest rates
- Expanded quantitative easing
This is a policy that explodes demand while supply is shrinking, producing a malignant stagflation.
This week’s oil surge represents a second supply shock (Hormuz Strait risk).
If excessive demand stimulus continues in a supply‑shock era, markets will inevitably react as they did.
VI. The 2020s: The Second Act of Great‑Power Politics
The 2020s mark the second act of great‑power nationalism:
- United States: Dollar hegemony + military pressure
- China: Opportunistic rise
- Russia: Strategic confidence amplified by soaring resource prices
This week’s oil surge reflects the interplay of these three forces.
**VII. Conclusion:
The Complacency of the Trump TACO and Takaichi Trades Leads to the Most Dangerous Era**
Complacency is the greatest risk.
- Complacency in trying to solve supply shocks with demand stimulus
- Complacency in misreading inflation as “transitory”
- Complacency in underestimating soaring resource prices
- Complacency in downplaying the revival of great‑power politics
This week’s markets showed that these warnings are becoming reality.
Unless the Hormuz Strait risk and related tensions subside, risk‑off sentiment will likely dominate for the foreseeable future.
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