The Yen is still strong and getting stronger

January 12, 2012


USDJPY is in a massive downtrend as you can see in the chart attached. It’s amazing after all these years of stagnation the Yen is still bid but then again we do know that Japan is still a functioning and coherent society so perhaps it I’d a safe place to put your funds in a world of massive uncertainty.

Anyway as always I respect trend lines until they break and so incongruous as it may seem USD/JPY is still biased lower – even at these levels.

From Bloomberg this afternoon quoting ANZ Head of FX Strategy, Richard Yetsenga.

By Ron Harui
Jan. 12 (Bloomberg) — Markets are presenting attractive
conditions to sell USD/JPY, Australia & New Zealand Banking
Group’s global head of FX strategy Richard Yetsenga writes in a
* After becoming sharply negative in Nov. 2011 on back of global scramble for dollars, and hence making it expensive to buy yen, forwards have now normalized: ANZ
* In options market, risk reversals are skewed to dollar calls at frond end for 1st time since 2004, and implied volatility is close to record low: ANZ
* Improvement in U.S. economy hasn’t yet been sufficient to lead to significant rise in U.S. bond yields and ANZ doubts it will
* Recent public U.S. pressure will likely drive Japan’s FX policy to rely more on domestic tools in an effort to influence the currency: ANZ
* Fears over Japan’s fiscal situation are overblown: ANZ
* USD/JPY little changed at 76.84

EURJPY is at life time lows as well so Japan had some headwinds enduring for industry.


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