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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 1558
Posted: Feb 22, 2010 5:00
Comments: 1558
Forum Topic:
JPY
Discuss JPY
Heres an interview i did in August explaining stubborn Yen Strength (still applicable) http://bit.ly/bYMesi
For those still asking why Yen rises during global fears, go to CHAPTER 5 in my book about CARRY TRADES, RISK AVERSION and the use of the yen as a funding currency.
http://www.ashraflaidi.com/book/
Ashraf
Why always when crisis happens in japan the value of the Japanese Yen increase ? why the investors get confident to buy Yen while they know that these crisis could destroy the hall Japanese economic ?
thanks allot
shorted again at 79.65 and got out at 79....
but looks to be headed back to 77 level... as long as it doesn't settle above 79.50 level....
gl/gt
Aware of Japanese investors chase for yield, FX traders trend to anticipate the repatriation operations (unwinding of yen carry trade) via speculative purchases of the Japanese currency and further enforcing it upwards. I expect the release of Japan's industrial production, consumer demand and GDP growth data due in 1-2 months to act as the catalyst for eventual yen weakness, which will likely drive USDJPY about 3-5% from current levels (85-86) but unlikely to go beyond that. PROSPECTS OF COORDINATED INTERVENTION are stronger than ever now that markets are approaching "Worse Case Scenario" territory. This means the whipsaws breaking the shorts are more than likely, as was seen in 2007 and 2008.
Seasonal yen weakness in April occurring after the conclusion of pre-fiscal year end repatriation is also likely to weigh on JPY in Q2. Buying USDJPY near the latest all-time lows may be produce a quick 70-100 pips, but maintaining a consistent success in such a volatile markets in the face of interventions, rumours and disasters could be dangerous, especially in a world of 50 or 100-1 leverage. If we saw 77, we may as well as 75 and 73 but chances of intervention shall grow stronger.
----- I cannot emphasize enough the relative consistency and reliability of EURUSD support near 1.3860-70s to rebound towards 1.3920-30s as the pair maintains its robustness in light of the dynamics I mentioned in the latest article.
http://bit.ly/hzMCKX
Ashraf