TOKYO - Salarymen scrolling through their phones on the subway are a common sight in Tokyo, but they aren’t all playing Pokémon Go — many are on trading apps, aggressively buying and selling the yen to profit from short-term swings.
Retail currency traders are having a field day as speculation mounts that the Bank of Japan is getting closer to raising its rock-bottom interest rates, with some betting on a move as soon as next week. The cohort of mainly middle-aged men is amplifying volatility in the fast-paced currency markets by seizing on intraday moves in a departure from their previous focus on interest rate differentials.
“I’m really convinced that in the current market, short-term trades have become super-profitable,” said Satoshi Hirai, 43, who trades alongside running a video studio in Gifu Prefecture in central Japan. Hirai’s been buying and selling the yen about 100 times a day recently, and used the money he’s made to buy a Leica camera and guitars to play in his punk rock band.
The increased involvement of mom-and-pop traders reflects the new monetary policy paradigm that Japan is facing. The country is the last hold-out for negative rates globally, despite inflation that’s remained elevated, spurring investors to pile on bets that the BOJ may adjust policy sooner rather than later. ...continue reading
