Two central banks on either side of the pacific tried to flex their muscles yesterday. In the morning the Bank of Japan (BoJ) shifted away from its fixed line of monetary easing and is now open to a more flexible approach. While later in the day, the Federal Reserve maintained its funds rate.

The markets, however, remained confused and investors were left scratching their heads as both central bank policy statements were followed by unintended consequences. The Yen started to rally again, exactly against the wishes of Bank of Japan.

The Yen is now up almost 20 percent for the year against the dollar, posing a big threat to an already deflated Japanese economy. Their exports are getting expensive by the day, while there is no domestic growth in sight.

On the other hand, after the fed-chair Janet Yellen was done with her press conference, the dollar started showing weakness. The fund rate was left unchanged at 0.25 to 0.5 percent, but the tone adopted was hawkish as oppose to a very dovish attitude presented in previous such events.

Janet Yellen left room for a hike down the road before the end of the year but she also, oddly, showed concerns over lack inflation and labour market conditions.

To make things even more baffling, three out of ten rate-setters for the Federal Reserve had voted to increase the rate. Making it the most divided committee in recent memory.

All top central bankers seem to have run out of ammunition as far as monetary stimulus is concerned. Their relentless easing policy has now become counter-productive with each measure being negated by the market. Many high profile fund managers are off the view that this unhinged path adopted by the central bankers is creating asset bubbles, especially in the stock market.

With rates at their historic low and going into negative territory in many countries, savers are forced to withdraw money from safe avenues such bonds and being pushed into riskier assets such as equities.

The tail risk here seems to be edging up and any black swan event would pierce its way through the global markets.