30 pip ranges in most of the major pairings is the sum total of Asia’s efforts today and my hope that volatility would increase pre-BOJ was totally misplaced. It looks like the market is comfortable with its positioning level at the moment.
The market has waited expectantly for this first Kuroda BOJ policy statement for months now and the Yen has depreciated by up to 20% against certain currencies during this period. I’m not sure that the Yen has a whole lot more short-term downside and the risk in my eyes is that the BOJ cannot fulfil the market’s excessive expectations. I may well be stopped out of my short EUR/JPY position before the event takes place but risk-reward would suggest to me that the main initial event risk for pairs like USD/JPY will be to the downside. Longer term bulls may take advantage of big dips but if the BOJ really disappoints, we could see levels near 88.50 in a hurry.