Big Trade – New CAD/JPY Orders 01.29.2016 +163

1/29 -- BoJ adopts negative rates, CAD/JPY soars, close at 86.22 for +163

1/29 -- Triggered

New CAD/JPY Orders

Aggressive Orders Only

Place Order to Buy CAD/JPY at 84.57

Stop at 82.57

We are taking the loss on GBP/JPY because all signs point to either easing or dovish comments from the Bank of Japan. While this may be hard to do, it is also the right thing to do because there are many reasons for the Bank of Japan to increase stimulus tonight. Since the December meeting we have seen the yen strengthen, inflation ease, retail sales fall, joblessness rise, industrial production decline and exports fall by the largest amount in 3 years. So while the trade deficit turned to surplus in December, manufacturing activity increased according to PMI and consumers grew more optimistic according to the Eco Watchers survey. However with the decline in commodity prices, China slowing and the see-saw moves in stocks that saw the Nikkei fall 10%, Japanese policymakers have a lot more to be worried about now than in December. Also according to the CFTC’s latest report, last week saw the biggest yen buying spree by speculators since February 2012. The Bank of Japan is notorious for their attempts to “get the best bang for their yen” by intervening or in this case easing when speculators are long.

We are flipping to a LONG CAD/JPY order because even with all of the headline noise today, oil is up 4%. These conflicting headlines tell us one thing which is that many oil producers are uncomfortable with crude at $30 a barrel. CaD GDP is also scheduled for release tomorrow and we believe it will be strong.


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