(Bloomberg) -- One word echoed across trading floors from Tokyo to Singapore as the Bank of Japan raised rates for the first time in 17 years — ‘finally’.

The buzz was palpable from the 17th floor trading room of Mitsubishi UFJ Trust & Banking Corp. in the heart of Tokyo, to Martin Place in Sydney, as traders tracked the most highly anticipated Bank of Japan decision in recent memory. 

When the announcement confirmed what markets had suspected for days, the yen fell, vindicating hedge funds that had placed bearish bets on Japan’s currency. Real estate stocks surged, benefiting the likes of Man Group Plc’s Japan fund that favored the sector into the meeting. And even though bond yields edged lower on Tuesday, there were encouraging signs for the bears: a footnote from the Bank of Japan’s statement that hinted they might buy fewer securities ahead. 

“The market’s reaction is akin to waiting so long to meet Santa Claus, you’re already an adult,” said Calvin Yeoh, who helps manage the Merlion Fund at Blue Edge Advisors in Singapore. 

The hedge fund manager is among those with short yen positions ahead of the historic meeting, that drew the likes of BlackRock Inc. to Morgan Stanley MUFG Securities Co. to bet that the world’s last anchor to negative rates would be lifted. The BOJ didn’t disappoint watchers, axing the most aggressive monetary stimulus program in modern history and relinquishing its grip on yields that had distorted the world’s third-largest bond market for years.

Read: BOJ Ends Era of Negative Rates With Few Clues on More Hikes

Traders at Mitsubishi UFJ Trust & Banking, located between Tokyo Station and the Imperial Palace, sprang into action after the announcement. Pings and beeps came from phones and monitors. People rushed to print out the policy statement, distributing it so traders could parse the BOJ language.

Among them was Motonari Sakai, who sat at his desk taking notes while wiping beads of sweat from his forehead with a white handkerchief. 

“I am excited,” said Sakai, 39, chief manager for the FX and financial products trading division. “While other countries such as the US are cutting interest rates, only Japan is raising interest rates. It is attracting attention.”

There was also optimism about growth in Japan — a boon for stock pickers. 

“The ability to raise rates at least back to zero is also a signal of a rather healthy and strong economy,” said Kelvin Leung, a portfolio manager at Robeco Hong Kong Ltd, adding that “the best play is Japanese real estate developers.”

Meanwhile, the credit market was assessing what a world without negative rates would look like.

“I’ll miss the BOJ trade a bit,” said Haruyasu Kato, a fund manager at Asset Management One Co., referring to the central bank’s plans to gradually reduce buying of corporate bonds and end the program in a year. 

“Many fund managers are here in the office because they expected the market to move,” said Tokyo-based Kato, who woke up every hour during the night Monday in case any more BOJ headlines came out. 

‘We Won’

About 4,850 miles away in Sydney, Nick Twidale, a markets veteran of 27 years was celebrating. Sitting with a cafe latte in hand in his central business district office a stone’s throw from the Reserve Bank of Australia’s headquarters, Twidale took some profit on his bearish yen wager against the dollar when the pair touched around 149.90 in Asia trading. 

“It certainly feels like we won — there were a lot of yen shorts across markets going into the meeting,” said Twidale, director of Cisa Consulting. He’s looking to book more gains on expectations Japan’s currency will weaken in the short term. 

It wasn’t just the professional traders who were closely following the decision. Japanese retail investors have been increasingly buying and selling currencies, and the revamping of tax-free accounts at the start of this year is drawing more to stocks. 

“It feels like ‘wow finally’,” said Kazuya Inui, a retail investor based in Shikoku, the smallest and least populated of Japan’s four main islands. “The yen has weakened after the announcement so I’m looking for an opportunity to short,” he said from an eyebrow salon about an hour after the BOJ decision.

Bond Bears

To be sure, many are cautious. Among them is 41-year-old Yasutaka Amano, a hairstylist at Gotemba, who trades equities as a hobby.

“I have no clear idea what is likely to happen to stock markets because this is the first domestic interest-rate hike I’ve experienced in my 17 years of investing,” said Amano, who owns the Amanos hair salon near Mt Fuji. “I also have some housing loans, so that makes me nervous.”

For the bond bears, patience may be a virtue. Yields fell after the decision but some BOJ watchers saw hints of a future pullback in the bank’s massive bond purchases in the statement.

Kellie Wood is among those holding short Japan bond positions into the meeting — and she’s happy to keep those bets. 

“Seems like the BOJ has done a good job in managing market expectations,” said the money manager at Schroders Plc. Still, “we are expecting further underperformance from JGBs as the BOJ start the gradual policy normalization process.”

--With assistance from Ayai Tomisawa, Mia Glass, Yumi Teso and Winnie Hsu.

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