- Closes at 15232.37 +0.48%
I’ve been having an interesting conversation on the twitter with someone who is relating yesterday’s shock move in USD/JPY with the news on the GPIF investment allocation news. I don’t entirely dispute the fact that someone knew this news was coming but if they were looking to profit from it the price action doesn’t really add up.
If they were buying yen to put into stocks then we would have likely seen a more positive move in the Nikkei early on in the Japanese session, not the losses. As someone who has had to scale big orders into a market you can only sit on the bid for so long before someone knows what you’re up to and then tries to front run you forcing you to pay higher. That said the bounce in the currency straight after may have coincided with Nikkei futures being bought.
Nikkei vs USD/JPY 07 08 2014
Without seeing the numbers what is more likely is that options would have been the favoured play, after all there’s a lot of time to pass until the official announcement so a lot could happen in the meantime. No point in piling it all in at one point in the stock market to find you’re 1000 pips underwater when the real announcement hits and it’s only worth a 500 point gain.
Was the big drop in USD/JPY a front run on the GPIF news?
Yes
No
Take the tin foil hat off Ryan
