Missing a trade like the Bank of Japan hurts.
I could feel the surprise coming in my bones. The economy was beginning to stumble, Abe was losing popularity and the only thing in his playbook is QE.
Credit to Kyle Bass, who is most well known for a rough year in GM shares but absolutely nailed it on the BOJ.
I’ve liked USD/JPY longs and saw all the signs the BOJ that something was coming but didn’t put the pieces together. The tell was yesterday and the leak on the GPIF announcement. I noted that it was old news but I was focused on the wrong thing.
It wasn’t the news of the GPIF that was the tell — it was the timing! And I was so close to sorting it out, I even noted that the announcement was scheduled for the same day as the BOJ and wrote about what it could do for stocks and the yen:
If the BOJ were to follow up with a fresh hint at QE today that would be the ultimate signal to go long Japanese stocks and short the yen.
In hindsight the timing was obviously purposeful and meant to deliver an absolute death blow to the yen. Arrrrrgh. Now the trick is to put a plan together to make money on the USD/JPY run to 1.20.
