Forum > View Topic
by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 1558
Forum Topic:

JPY

Discuss JPY
 
catnip
Frankfurt, Germany
Posted Anonymously
11 years ago
Sep 16, 2010 6:50
Ashraf's IMT makes sense indeed. When so many fx traders scratch their heads something is wrong with the standard media&panelist argumentation. :-)
FrankBrit
Frankfurt am Main, Germany
Posts: 73
11 years ago
Sep 16, 2010 6:44
If that's the case Ashraf, then it sounds like celebrity death match ... But the Chinese likely have a bigger toolkit to choose from than their counterparts and the market/history in their sails.
Carlco
bristol, UK
Posts: 151
11 years ago
Sep 16, 2010 6:25
does anyone know why Japan couldn't emergency peg its currency? or is this technically too difficult?
cygnus
New York, United States
Posts: 63
11 years ago
Sep 16, 2010 3:33
...meanwhile, Beijing keeps its own currency tightly controlled to benefit its exporters.

The yuan has risen less than 1 percent against the dollar since mid-June when Beijing said it would allow it to trade more freely after keeping it virtually unchanged for 18 months.
Qiman
United States
Posts: 237
11 years ago
Sep 16, 2010 3:27
Ashraf, thanks for that extremely interesting post, much food for thought, and this geopolitical theory merits further investigation. And all of this is also a great reminder of just how difficult it is for a central bank to control the destiny of its own currency, forex is such a huge market and not easily manipulated for anything but a short period.
Ashraf Laidi
London, UK
Posts: 0
11 years ago
Sep 16, 2010 1:57
Perhaps forex speculation is just a sideshow and this intervention is a battle btwn Japan & China? With china buying more JGBS, maybe it wants to run the country deep into deflatipn while making money along the way. Tokyo already getting agry w/ Beijing "stop buying our JGBs and driving our yen excessively higher". SO the aggressive intervention might be a loud message to China. Tokyo already sought disucssions with Beijing

So here it is:

1) China buys JGBs
2) JPN answers back w/ intervention to weaken yen & discourage CHina buying
3) PBOC tightens policy & drives yen back up.

Art of War my friends

Ashraf
FrankBrit
Frankfurt am Main, Germany
Posts: 73
11 years ago
Sep 15, 2010 23:52
@ catnip. You may have hit on another reason in your last: trying to blunt the normal seasonal strengthening of the JPY at this time of year and prevent it taking the JPY into overdrive.
catnip
Frankfurt, Germany
Posted Anonymously
11 years ago
Sep 15, 2010 22:04
It is repeated all over that will help the export industry. I think the jap industry exported about the same quantities when USDJPY was 94 ( during the EUR crisis ) as they do now but they got more JPY and that was counter deflation. Japan exports machines autos electronics home appliances all these depned in demand on the state of US economy and this hasn't changed since. So the BoJ still attempts to fight deflation and that helps US treasury to sell more debt.
I am pretty confident it won't work. Especially the Boj tends at the end of Sept always to inject ample supply. The only winner so far is US treasury and with respect ot FOMC I think the timing of intervention was wrong.
ptaczek
Brno, Czech Republic
Posts: 110
11 years ago
Sep 15, 2010 21:44
Y35 trillion? That's 17 days of intervening. And the higher the USDJPY goes the more japanese exporters and traders will sell. Even with intervention of that size I still don't see the trend reversed. They can slow it down to some degree but there's no consistent GLOBAL recovery on sight (or at least I don't see any), so why sell yens?
catnip
Frankfurt, Germany
Posted Anonymously
11 years ago
Sep 15, 2010 21:29
Yes I keep on scratching...
Goldman analyst says the BOJ has Y35 trillion of intervention capacity.
That is about USD 400 bln . Geithner needs not worry about UST auctions meeting lukewarm demand, rather the treasury doesn't have enough treasuries to sell...