No joy from the BoJ

In mid-morning trading the FTSE 100 is 80 points lower, as events in Japan cancel out good news from Facebook.

• BoJ’s ‘do nothing’ strategy fails to impress

• Lloyds slumps while Deutsche soars

• US GDP expected to be fairly gloomy

It is hard not to feel sorry for the Bank of Japan. It has tried unconventional policy once this year, and it didn’t work. Now it has tried to be unconventionally conventional, sitting on its hands, and this hasn’t worked either. In both cases the market has decided to push the yen higher, causing the usual howls of anguish at Japanese exporters. The lack of action, perversely, proves that central bank stimulus still has the power to shock, both when it is tried and when it isn’t. This is a salutary lesson for the Fed and the ECB, both of whom are grappling with their own policy problems. The perversity of the market was also amply demonstrated with this morning’s crop of banking results. Lloyds posted a decent set of numbers, with a strong capital ratio and a promising increase in the key net interest margin number, while Deutsche Bank served up a thin gruel for investors in both its results for the quarter and its outlook. And yet its shares have surged while those of Lloyds have dived. At least George Osborne will be happy with Lloyds, as this morning’s numbers make a further sale of the government’s stake much more likely within the next twelve months.

In the face of such crashing disappointment from the BoJ, Facebook’s good numbers last night may get drowned out, but they still prove that this social network still has the magic formula where money-making is concerned. Attention now shifts to the GDP number for the US today, which is expected to offer little cheer for investors, while the FOMC statement last night was scrupulous in its neutrality, offering little help for other doves or hawks.