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 The JPY thread

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Snapman

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PostSubject: The JPY thread   Wed Mar 03, 2010 11:02 pm

The Yen has been strong the dollar from last year 09 up through 1st quarter 2010? Any thoughts why fundamentally? Or what thesis is driving this?

Can't be carry trade with interest rate differentials around the world at all time lows. Or is it a regional difference with its proximity to emerging asia? Or is it the political climate? Or are current econ data relative healthy vs past econ data?

Also i would note its strong vs the AUD as well and other developed pairs. I would appreciate any feed back!

-snapman
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PostSubject: Re: The JPY thread   Thu Mar 04, 2010 2:27 pm

Via DailyFX.com:

Japanese Yen Shows Little Response to a Marked Improvement in Growth
There is little room for the Japanese yen to develop any meaningful improvement in its position through a fundamental health perspective given its deep roots in the carry trade. Nonetheless, event risk over the past 24 hours has shown significant progress in setting the economy and markets back on pace. Earnings for Japanese workers through January grew (0.1 percent) for the first time in 20 months – an inflation contribution. Furthermore, the contraction in capital spending through the 4Q (17.3 percent) was the smallest in a year
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PostSubject: Re: The JPY thread   Thu Mar 04, 2010 4:47 pm

Well i wasnt looking at fundamentals, i was looking at technicals I have been long since over night and its working! cheers
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Sauros

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PostSubject: Re: The JPY thread   Thu Mar 04, 2010 11:17 pm

Snapman wrote:
The Yen has been strong the dollar from last year 09 up through 1st quarter 2010? Any thoughts why fundamentally? Or what thesis is driving this?

Can't be carry trade with interest rate differentials around the world at all time lows. Or is it a regional difference with its proximity to emerging asia? Or is it the political climate? Or are current econ data relative healthy vs past econ data?

Also i would note its strong vs the AUD as well and other developed pairs. I would appreciate any feed back!

-snapman

I'd say unwind of Carry trade and deleveraging
After Lehman collapsed in Sept08, the carry trade was massively unwound. The guys took their losses in USD and reimbursed the JPY they borrowed: that drove the USDJPY down.
When the markets rallied from March 09 onwards, I guess the participants kept deleveraging and as you mentionned the carry trade was less appealing and the move of the USDJPY down just gained some more momentum. That's for the big swing.
Now more "locally", the JPY is a safe haven vs the USD (reminiscences of the carry trade), that's the risk aversion play : when the markets go down so the USDJPY (and the EURUSD)

Now it's good you started this thread as I'm still doing my homework on Japan.
It seems in 2004-2005 that Japan's economy finally showed first signs of a recovery after almost 2 decades of recession (unfortunately a few years before the global crisis): it appeared that the solution to get out of the liquidity trap where it fell was : expected inflation. I think today that lesson is learned and I guess, should the global recovery remains, that the Japanese will do anything to fight the current deflation and find a way to devalue the JPY. I believe there will be a huge swing up of the USDJPY (>100) sooner or later and I'm just waiting for the right time to start building the position. Basically if i want to benefit at the same time of the risk aversion play, I should wait for the bull stock market to come back (my guess is it may be the case very very soon)
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PostSubject: Re: The JPY thread   Fri Mar 05, 2010 2:38 am

Sauros wrote:
Snapman wrote:
The Yen has been strong the dollar from last year 09 up through 1st quarter 2010? Any thoughts why fundamentally? Or what thesis is driving this?

Can't be carry trade with interest rate differentials around the world at all time lows. Or is it a regional difference with its proximity to emerging asia? Or is it the political climate? Or are current econ data relative healthy vs past econ data?

Also i would note its strong vs the AUD as well and other developed pairs. I would appreciate any feed back!

-snapman

I'd say unwind of Carry trade and deleveraging
After Lehman collapsed in Sept08, the carry trade was massively unwound. The guys took their losses in USD and reimbursed the JPY they borrowed: that drove the USDJPY down.
When the markets rallied from March 09 onwards, I guess the participants kept deleveraging and as you mentionned the carry trade was less appealing and the move of the USDJPY down just gained some more momentum. That's for the big swing.
Now more "locally", the JPY is a safe haven vs the USD (reminiscences of the carry trade), that's the risk aversion play : when the markets go down so the USDJPY (and the EURUSD)

Now it's good you started this thread as I'm still doing my homework on Japan.
It seems in 2004-2005 that Japan's economy finally showed first signs of a recovery after almost 2 decades of recession (unfortunately a few years before the global crisis): it appeared that the solution to get out of the liquidity trap where it fell was : expected inflation. I think today that lesson is learned and I guess, should the global recovery remains, that the Japanese will do anything to fight the current deflation and find a way to devalue the JPY. I believe there will be a huge swing up of the USDJPY (>100) sooner or later and I'm just waiting for the right time to start building the position. Basically if i want to benefit at the same time of the risk aversion play, I should wait for the bull stock market to come back (my guess is it may be the case very very soon)

Mm mm, yes yes indeed. Thank you very much for the insights. Most of what you said makes sense to me and I can agree fundamentally for the most part. Its good to see you are looking at some history lessons ;-) . Ill post more on this later.

-snapman
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PostSubject: Re: The JPY thread   Fri Mar 05, 2010 11:37 pm

Sauros wrote:

It seems in 2004-2005 that Japan's economy finally showed first signs of a recovery after almost 2 decades of recession (unfortunately a few years before the global crisis): it appeared that the solution to get out of the liquidity trap where it fell was : expected inflation. I think today that lesson is learned and I guess, should the global recovery remains, that the Japanese will do anything to fight the current deflation and find a way to devalue the JPY. I believe there will be a huge swing up of the USDJPY (>100) sooner or later and I'm just waiting for the right time to start building the position. Basically if i want to benefit at the same time of the risk aversion play, I should wait for the bull stock market to come back (my guess is it may be the case very very soon)
A couple of hours after I wrote this, Japanese media speculated (also) that Japan would consider further easing of monetary policy. Very very soon, the time may have come but we still have the time, the target is 100+ guys!
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PostSubject: Re: The JPY thread   Tue Mar 30, 2010 10:42 pm

I (finally) initiated a long USDJPY at around 92.5, the very first position of what I hope will end up as a good ride. I'll detail further the rationale later but for the time being let's say that :
1 - I see unlikely it coming below 85 while 100+ could be considered
2 - it partially hedges my long JPY position underlying in my long asian including japan equity fund position (while I don't hedge the other currencies of the fund : yuan, rupia, aussie, etc...)
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PostSubject: Re: The JPY thread   Wed Mar 31, 2010 10:16 pm

Sauros wrote:
I (finally) initiated a long USDJPY at around 92.5, the very first position of what I hope will end up as a good ride. I'll detail further the rationale later but for the time being let's say that :
1 - I see unlikely it coming below 85 while 100+ could be considered
2 - it partially hedges my long JPY position underlying in my long asian including japan equity fund position (while I don't hedge the other currencies of the fund : yuan, rupia, aussie, etc...)

+100 pips in a day, that's a good start
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PostSubject: Re: The JPY thread   Thu Apr 01, 2010 4:10 pm

Sauros wrote:
Sauros wrote:
I (finally) initiated a long USDJPY at around 92.5, the very first position of what I hope will end up as a good ride. I'll detail further the rationale later but for the time being let's say that :
1 - I see unlikely it coming below 85 while 100+ could be considered
2 - it partially hedges my long JPY position underlying in my long asian including japan equity fund position (while I don't hedge the other currencies of the fund : yuan, rupia, aussie, etc...)

+100 pips in a day, that's a good start
+50 pips more for the day, better and better
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PostSubject: Re: The JPY thread   Sun Apr 04, 2010 10:14 pm

Sauros wrote:
Sauros wrote:
Sauros wrote:
I (finally) initiated a long USDJPY at around 92.5, the very first position of what I hope will end up as a good ride. I'll detail further the rationale later but for the time being let's say that :
1 - I see unlikely it coming below 85 while 100+ could be considered
2 - it partially hedges my long JPY position underlying in my long asian including japan equity fund position (while I don't hedge the other currencies of the fund : yuan, rupia, aussie, etc...)

+100 pips in a day, that's a good start
+50 pips more for the day, better and better
94.55 +200 pips for Sauros
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PostSubject: Re: The JPY thread   Mon Apr 05, 2010 6:38 pm

Nice work!
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PostSubject: Re: The JPY thread   Mon Apr 12, 2010 9:40 pm

Sauros wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
I (finally) initiated a long USDJPY at around 92.5, the very first position of what I hope will end up as a good ride. I'll detail further the rationale later but for the time being let's say that :
1 - I see unlikely it coming below 85 while 100+ could be considered
2 - it partially hedges my long JPY position underlying in my long asian including japan equity fund position (while I don't hedge the other currencies of the fund : yuan, rupia, aussie, etc...)

+100 pips in a day, that's a good start
+50 pips more for the day, better and better
94.55 +200 pips for Sauros

hoohooo 93.2, I gave back most of my gains. Sad
It went down to 10 pips above my stop but I'm still alive on this. Still a bull on the pair.
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PostSubject: Re: The JPY thread   Tue Apr 13, 2010 4:23 pm

Sauros wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
I (finally) initiated a long USDJPY at around 92.5, the very first position of what I hope will end up as a good ride. I'll detail further the rationale later but for the time being let's say that :
1 - I see unlikely it coming below 85 while 100+ could be considered
2 - it partially hedges my long JPY position underlying in my long asian including japan equity fund position (while I don't hedge the other currencies of the fund : yuan, rupia, aussie, etc...)

+100 pips in a day, that's a good start
+50 pips more for the day, better and better
94.55 +200 pips for Sauros

hoohooo 93.2, I gave back most of my gains. Sad
It went down to 10 pips above my stop but I'm still alive on this. Still a bull on the pair.

Did you exit today?
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PostSubject: Re: The JPY thread   Tue Apr 13, 2010 8:39 pm

Batman wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
I (finally) initiated a long USDJPY at around 92.5, the very first position of what I hope will end up as a good ride. I'll detail further the rationale later but for the time being let's say that :
1 - I see unlikely it coming below 85 while 100+ could be considered
2 - it partially hedges my long JPY position underlying in my long asian including japan equity fund position (while I don't hedge the other currencies of the fund : yuan, rupia, aussie, etc...)

+100 pips in a day, that's a good start
+50 pips more for the day, better and better
94.55 +200 pips for Sauros

hoohooo 93.2, I gave back most of my gains. Sad
It went down to 10 pips above my stop but I'm still alive on this. Still a bull on the pair.

Did you exit today?

SORRY SORRY for my absence on this thread. I had an open position form 90+ to 94+. JPY has been my best trade all year, mind you it was all a pure technical play. its only till recently that i have gotten a better grasp on the political/econ/fiscal situation in japan.

To me it seems lots of uncertainty is coming back into this pair. slightly down today inline wiht major pairs. whose still long jpy!?!?
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PostSubject: Re: The JPY thread   Wed Apr 14, 2010 10:01 pm

Batman wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
I (finally) initiated a long USDJPY at around 92.5, the very first position of what I hope will end up as a good ride. I'll detail further the rationale later but for the time being let's say that :
1 - I see unlikely it coming below 85 while 100+ could be considered
2 - it partially hedges my long JPY position underlying in my long asian including japan equity fund position (while I don't hedge the other currencies of the fund : yuan, rupia, aussie, etc...)

+100 pips in a day, that's a good start
+50 pips more for the day, better and better
94.55 +200 pips for Sauros

hoohooo 93.2, I gave back most of my gains. Sad
It went down to 10 pips above my stop but I'm still alive on this. Still a bull on the pair.

Did you exit today?

it went to a tiny 5 pips close to my stop but I'm still alive. Next time I'll avoid Japanese stuff, too jumpy
Up 200 pips down 300 and up and down and up and down, makes me sick
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PostSubject: Re: The JPY thread   Wed Apr 14, 2010 10:13 pm

Sauros wrote:
Batman wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
Sauros wrote:
I (finally) initiated a long USDJPY at around 92.5, the very first position of what I hope will end up as a good ride. I'll detail further the rationale later but for the time being let's say that :
1 - I see unlikely it coming below 85 while 100+ could be considered
2 - it partially hedges my long JPY position underlying in my long asian including japan equity fund position (while I don't hedge the other currencies of the fund : yuan, rupia, aussie, etc...)

+100 pips in a day, that's a good start
+50 pips more for the day, better and better
94.55 +200 pips for Sauros

hoohooo 93.2, I gave back most of my gains. Sad
It went down to 10 pips above my stop but I'm still alive on this. Still a bull on the pair.

Did you exit today?

it went to a tiny 5 pips close to my stop but I'm still alive. Next time I'll avoid Japanese stuff, too jumpy
Up 200 pips down 300 and up and down and up and down, makes me sick

gotta ride the trend man, keep your stops updated but give it room to breath, thats the only way i was able to get so high on this trade... other wise i woudla taken profits at 92 or 93..

but i think i like this pair a lot becuase its relatively cheaper to trade and is these days some what uncorlated to the other pairs.

i like it for technical plays at least :p

making sense of fundamentals in that country may make you go bananas
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PostSubject: Re: The JPY thread   Mon Apr 26, 2010 9:49 pm

Sauros wrote:

it went to a tiny 5 pips close to my stop but I'm still alive. Next time I'll avoid Japanese stuff, too jumpy
Up 200 pips down 300 and up and down and up and down, makes me sick

Got stopped near 92.5 where I initiated my long position but had a loss as I pyramided twice on the way up to 94.5. Caught it back above 93 up to 94+, made my losses back but now it trades below 94.
Up down up down, I'm still sick
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PostSubject: Re: The JPY thread   Mon Apr 26, 2010 10:36 pm

Sauros wrote:
Sauros wrote:

it went to a tiny 5 pips close to my stop but I'm still alive. Next time I'll avoid Japanese stuff, too jumpy
Up 200 pips down 300 and up and down and up and down, makes me sick

Got stopped near 92.5 where I initiated my long position but had a loss as I pyramided twice on the way up to 94.5. Caught it back above 93 up to 94+, made my losses back but now it trades below 94.
Up down up down, I'm still sick


LOL i feel you man, i just kept to my price target, didn't bother watching to close with the up down up down, you gonna get a heart attack at this rate ;-)
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PostSubject: Re: The JPY thread   Tue Apr 27, 2010 9:26 pm

Snapman wrote:
you gonna get a heart attack at this rate ;-)

Sauros:
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PostSubject: Re: The JPY thread   Wed Jun 08, 2011 11:13 pm

Funny how we talked about this earlier today and now the FT reporting it... Though, we cannot be certain of the aggregate effects pertaining to debt swaps from short-term paper to longer term notes. However, if this becomes a trend, we may expect the Yen to remain reasonably stout for an extended period of time and perhaps replace the greenback as the prominent risk-off currency.

Strong Yen/USD = Cheaper Oil and Coal

http://ftalphaville.ft.com/blog/2011/01/19/463001/chinas-bond-purchasing-games/
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PostSubject: Re: The JPY thread   Thu Jun 09, 2011 9:05 am

Batman wrote:
Funny how we talked about this earlier today and now the FT reporting it... Though, we cannot be certain of the aggregate effects pertaining to debt swaps from short-term paper to longer term notes. However, if this becomes a trend, we may expect the Yen to remain reasonably stout for an extended period of time and perhaps replace the greenback as the prominent risk-off currency.

Strong Yen/USD = Cheaper Oil and Coal

http://ftalphaville.ft.com/blog/2011/01/19/463001/chinas-bond-purchasing-games/

Yeah... as we talked about.
Many thanks for the link, interesting and to be followed closely.
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