I did not want to have to post until after my holiday, but due to the significance of this mornings events, their is little choice in the matter. The BOJ has shocked all the markets by boosting stimulus much earlier than expected, and the divergence between the USD and JPY has started months earlier than expected. This is good for us.
You are probably asking why the USDJPY etc are down from yesterday at the moment if this is good? Well I have a few ideas that i think are valid:
1.) Tight liquidity in December and Institutions hitting their TP. After the announcement, the USDJPY jumped to 123.52 and the GBPJPY jumped to 183.88. I think a lot of the US and European institutional investors would have hit their TPs at this point.
2.) Falling oil prices.
3.) Further profit taking on the USD as we come on the end of the week.
I think the current fall is nothing to worry about and will be VERY short lived as fundamentally the BOJ has losened monetary policy while the FED is tightening and the BOE is holding. As a result, I am extending out TP on the GBPJPY from 188 to 190, as I feel we may now gain more on this trade then envisioned.
It will also be interesting to see what happens when OIL expires today.
Back to packing,