Bank of Japan Stingy with Stimulus

The “buy the rumor sell the fact belief” holds sway over the Japanese Yen; after weeks of anticipation, the Bank of Japan finally announced its latest plan to stoke the Japanese economy. The BoJ board earlier today unanimously agreed to increase their bond buying program by ¥11 trillion, very near the low end of markets’ estimates. As expected, the bank’s key interest remain would remain unchanged at the current 0% to 0.1%.

The hope and intent of the Japanese central bank is that additional stimulus would make Japanese exports competitive again in a world where easing is so prevalent. However, because the Bank’s monetary policy decision had already largely been priced in, and because the meager amount of the stimulus was relatively disappointing to markets, the Yen’s appreciation is nearly a surety.

Already, the USD/JPY pair is trading lower at 79.5870 Yen as the realization dawns on traders that this is as bad as it’s going to get, thus they can move safe haven flows back into the Yen. OpenBook sentiment is predominantly bullish, with 75% of traders buying against 25% selling. OpenBook trader RupaRiver from Bangladesh earned 10.1% on a long position in the USD/JPY pair that was opened for only 22 minutes; another profitable long that was opened for only 15 minutes earned 7.6%. Over the past three months, the trader’s 1.8% allocation in the pair has earned 2.7%; the portfolio’s realized equity over the same period was 119.8%. As of this writing, the trader has 58 followers and 16 copiers.

The EUR/JPY pair is also lower, currently trading at 102.6835; sentiment on OpenBook is equally bullish on the pair, with 76% of traders buying. OpenBook trader hwonda0 from Nigeria earned 16.4% on a short position in the pair which helped to improve his weekly stats with realized equity for the last week reported at 29.5%. The trader has 12 followers and 1 copier as of this writing. OpenBook guru mfmfuzz from Sri Lanka earned 5.5% on a long position in the pair for himself and his 2,741 copiers. The guru’s 0.3% allocation in the pair has earned 5% over the past six months, with realized equity over the same period at 46.4%.

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