Fundamentals for dollar exhausted, USD a highwire act at this price, 50 pips or so above 114 spot. Nikkei 225 has resumed march up, which will continue. (Those equities oversold last week on bird flu and other shadows.) So, on Globex, now buying near month Yen at and below .__8800, averaging in, for long term position, looking for more than 300 ticks. Stops to be stair-stepped just north/just south of 8700.
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Yen now and through the summer
- Thread starter Chood
- Start date
Fundamentals for dollar exhausted, USD a highwire act at this price, 50 pips or so above 114 spot. Nikkei 225 has resumed march up, which will continue. (Those equities oversold last week on bird flu and other shadows.) So, on Globex, now buying near month Yen at and below .__8800, averaging in, for long term position, looking for more than 300 ticks. Stops to be stair-stepped just north/just south of 8700.
Chood, funnymentally speaking, your arguments in favor of a Yen long are sound and I agree.
Same arguments can be brought up for Euro (stocks up +20% YTD in most Eurozone economies and bonds @ 60yr highs / yields @ 60yr lows). And remember that it's not some small market we're talking about: Euro sovereign bond market is TWICE the US bond market.
Apparently
1/ "real money" flows (into bonds and stocks of a particular currency) don't have the expected influence.
2/ Even the FCBs have been rather inactive since 1-Sep, which is why US interest rates have been going higher.
neither had any effect on forex rates.
Seems like the forex market is entirely driven by the highly leveraged (into the trillions) speculating community playing carry trades, which is why we see huge moves at the slightest hint that interest rate differentials might change.
I've asked this particular question several times, but despite the large pool of sophisticated forex players on ET, nobody sofar has stepped up and provide some feedback.
PS: I also have a "core" position in Yen, which is underwater. I should have known better and remained with precious metals, rather than confettis which value the central banksters can and do destroy at will...
Same arguments can be brought up for Euro (stocks up +20% YTD in most Eurozone economies and bonds @ 60yr highs / yields @ 60yr lows). And remember that it's not some small market we're talking about: Euro sovereign bond market is TWICE the US bond market.
Apparently
1/ "real money" flows (into bonds and stocks of a particular currency) don't have the expected influence.
2/ Even the FCBs have been rather inactive since 1-Sep, which is why US interest rates have been going higher.
neither had any effect on forex rates.
Seems like the forex market is entirely driven by the highly leveraged (into the trillions) speculating community playing carry trades, which is why we see huge moves at the slightest hint that interest rate differentials might change.
I've asked this particular question several times, but despite the large pool of sophisticated forex players on ET, nobody sofar has stepped up and provide some feedback.
PS: I also have a "core" position in Yen, which is underwater. I should have known better and remained with precious metals, rather than confettis which value the central banksters can and do destroy at will...
Mtzianos,
Agree especially with your assessment of white-hot, filament-fragile derivatives positions in forex. Cash that is 1 % of 8 % of 15 % which then buys and sells on even further percentages causes some inexplicable price action. That's why actual cash in equities (Nikkei), which is long term and in full, or mostly of the latter, impresses me.
Agree especially with your assessment of white-hot, filament-fragile derivatives positions in forex. Cash that is 1 % of 8 % of 15 % which then buys and sells on even further percentages causes some inexplicable price action. That's why actual cash in equities (Nikkei), which is long term and in full, or mostly of the latter, impresses me.
mm...Quote from Chood:
Mtzianos,
Agree especially with your assessment of white-hot, filament-fragile derivatives positions in forex. Cash that is 1 % of 8 % of 15 % which then buys and sells on even further percentages causes some inexplicable price action. That's why actual cash in equities (Nikkei), which is long term and in full, or mostly of the latter, impresses me.
nice Journal ya got goin' here, Chode.
*yawn*
Quote from Chood:
Fundamentals for dollar exhausted, USD a highwire act at this price, 50 pips or so above 114 spot. Nikkei 225 has resumed march up, which will continue. (Those equities oversold last week on bird flu and other shadows.) So, on Globex, now buying near month Yen at and below .__8800, averaging in, for long term position, looking for more than 300 ticks. Stops to be stair-stepped just north/just south of 8700.
50 ticks above water now for averaged in Yen long, above, after drawdown of about that same magnitude (-44 ticks).
If/when price pierces ._8900, trailing stop to be set at entry (avg in 8795).
Waiting for 300 ticks.
Another aspect of the issue of artificially suppressed USD/JPY, the woes of US automakers:
Statement of Mustafa Mohatarem, Ph.D., Chief Economist, General Motors, Detroit, MI
Testimony Before the Full Committee
of the House Committee on Ways and Means
September 28, 2005
"For those who may question whether the exchange rate policies of our trading partners are important factors affecting U.S. competitiveness, half-year earnings statements just released by Japanâs automakers answer that conclusively. Toyota, Nissan, Honda, Subaru, and Japanâs other auto companies announced last week that they earned nearly $1 billion in unanticipated windfall profits in the first half of fiscal year 2005. These were due exclusively to the artificial weakness of the yen.
Most Japanese automakers set a projected exchange rate of 105 yen/dollar as their benchmark at the beginning of the 2005 fiscal year. But, because Japanese government policies resulted in a yen/dollar exchange rate much weaker than that, Japanese automakersâ total profits increased by 112 billion yen â over $1 billion â above what they projected. Much of that profit increase came as a result of sales in the United States. According to the Nikkei news service, the breakdown of these additional weak currency-driven profits include 50 billion yen / $452 million for Toyota, 28 billion yen / $253 million for Nissan, and 14.2 billion yen / $127 million for Honda.
With no sign that the Japanese government will change its exchange rate policy to allow the yen to rise to its true market level (90 to 100 yen per dollar is the commonly accepted range), the full-year windfall provided by the Japanese governmentâs currency policy could likely be a check for $2 billion written to Japanâs automakers."
http://waysandmeans.house.gov/hearings.asp?formmode=printfriendly&id=3798
Statement of Mustafa Mohatarem, Ph.D., Chief Economist, General Motors, Detroit, MI
Testimony Before the Full Committee
of the House Committee on Ways and Means
September 28, 2005
"For those who may question whether the exchange rate policies of our trading partners are important factors affecting U.S. competitiveness, half-year earnings statements just released by Japanâs automakers answer that conclusively. Toyota, Nissan, Honda, Subaru, and Japanâs other auto companies announced last week that they earned nearly $1 billion in unanticipated windfall profits in the first half of fiscal year 2005. These were due exclusively to the artificial weakness of the yen.
Most Japanese automakers set a projected exchange rate of 105 yen/dollar as their benchmark at the beginning of the 2005 fiscal year. But, because Japanese government policies resulted in a yen/dollar exchange rate much weaker than that, Japanese automakersâ total profits increased by 112 billion yen â over $1 billion â above what they projected. Much of that profit increase came as a result of sales in the United States. According to the Nikkei news service, the breakdown of these additional weak currency-driven profits include 50 billion yen / $452 million for Toyota, 28 billion yen / $253 million for Nissan, and 14.2 billion yen / $127 million for Honda.
With no sign that the Japanese government will change its exchange rate policy to allow the yen to rise to its true market level (90 to 100 yen per dollar is the commonly accepted range), the full-year windfall provided by the Japanese governmentâs currency policy could likely be a check for $2 billion written to Japanâs automakers."
http://waysandmeans.house.gov/hearings.asp?formmode=printfriendly&id=3798
seems like the yen is in a race with the euro to get to zero.
attracting lots of cap to Japan these days, imho.
attracting lots of cap to Japan these days, imho.
Time to close this thread. Summer over.
"Excellence in thread" awards to mtzianos and naz9403.
naz9403, early on in the thread, said presciently that "more upside to the dollar than yen technically speaking." From date of that post to now, anyone who position traded on that advice would have reaped about a 3-to-1 reward to risk, comparing drawdown to max profit, plus the carry if in spot. (Caveat: most of that reward came, technically, after the summer ended. Still, the call, as a longer term proposition, was better than those of the Yen bulls, myself included.)
mtzianos, in several posts, correctly and cogently described pronounced Yen-negative effect of BOJ's/MOF's easy money policy. His fundamental analysis proves the most correct of anyone who weighed in.
"Excellence in thread" awards to mtzianos and naz9403.
naz9403, early on in the thread, said presciently that "more upside to the dollar than yen technically speaking." From date of that post to now, anyone who position traded on that advice would have reaped about a 3-to-1 reward to risk, comparing drawdown to max profit, plus the carry if in spot. (Caveat: most of that reward came, technically, after the summer ended. Still, the call, as a longer term proposition, was better than those of the Yen bulls, myself included.)
mtzianos, in several posts, correctly and cogently described pronounced Yen-negative effect of BOJ's/MOF's easy money policy. His fundamental analysis proves the most correct of anyone who weighed in.