How to profit from the Japanese new(?) interest raste clycle

Daal · Jul 17, 2006

If they start hiking it up(and it looks like they will) whats the best instrument on a us broker that you can profit with it?Can you short their bonds?

Mr B · Jul 17, 2006

or you could go long yen vs dollar.

that way you take advantage of their rate increases and the rate cuts in the US.

niceneasy · Jul 17, 2006

end up paying 5.% and change to short usd/jpy (long yen).no?

ImamicPH · Jul 17, 2006

Quote from niceneasy:

end up paying 5.% and change to short usd/jpy (long yen).no?

Considering how much the yen has moved to the upside I think it's time for a reversal.

To trade this interest rate thing in Japan think about shorting eurodollars.

scriabinop23 · Jul 17, 2006

how about buying puts on ewj -- the nikkei is bound to have some nervousness from pressure of possible (worldwide) economic slowdown ?

TMcKenna · Jul 17, 2006

Quote from Mr B:

or you could go long yen vs dollar.

that way you take advantage of their rate increases and the rate cuts in the US.

Why not short eur/jpy instead?

scriabinop23 · Jul 17, 2006

btw, look on front page of bloomberg.com. there is a video of Weinberg of high frequency -- his opinion maintaining that the japanese bond market already priced in the rate hike, and to expect little movement as a result of it going forward. Even to the point it'll have little actual economic impact.

Mr B · Jul 18, 2006

cos euro rates will go up.

and will go up faster than jap rates if the BoJ as euro inflation is worse, euro growth is satisfactory and ECB statements are much more hawkish.

whereas the Fed are dovish.

Goldman were taking a short eur/yen a coupla weeks ago with a stop about 146, got stopped out. ECB too hawkish, BoJ not hawkish enough.

Daal · May 6, 2007

Quote from scriabinop23:

btw, look on front page of bloomberg.com. there is a video of Weinberg of high frequency -- his opinion maintaining that the japanese bond market already priced in the rate hike, and to expect little movement as a result of it going forward. Even to the point it'll have little actual economic impact.

I'm always leery when I hear that something is 'priced in', people who say that are usually academics who got all their money on t-bills and dont want to fill like their missing the boat

ig0r · May 6, 2007

Quote from Daal:

I'm always leery when I hear that something is 'priced in', people who say that are usually academics who got all their money on t-bills and dont want to fill like their missing the boat

The odds of the event are priced in, it will still move (regardless of the outcome) unless the odds of the event are 100% - which I'd say they're not.