Usd/jpy

wait for a retrace back to to 118.50 or failing that, 118.00 Then buy.

A short right now is only a potential scalp play. Maybe 30 - 60 pips.

Just my opinion.

 

Selling near month YEN future this session at/if .008591, avging in to .008607 (up to 4), stops for all to be set at .008710, set up similar to trade two weeks ago. Profit target under 8400.

 

Does it occur to anyone that a shortfall in funding the twin US deficits, as expressed in today’s data on capital inflows, will increase the yield on dollar assets above the yield on, say, the yen, promoting the carry trade, thereby boosting the dollar? Basically, if the twin deficits aren't fully funded, won’t yields on US debt (and consider the various types) have to increase to attract capital inflows?

This is one factor why I believe dollar upside is the right side, especially versus the yen.

 

Great point,

We just have to figure out when this will occur. So we do not get burned too eraly shorting the Yen.


Regards
Steve

 

Good question. I think the answer also depends upon whether or not the increase in yields will offset the decrease in the value of the currency. If people are afraid USD will depreciate more than the yields will increase, they will not buy the bonds.

 

TenTwenty,

I understand your point, of course, because in the past, not to my profit, I have been a structural/fundamentalist bear on the dollar, precisely for the reasons today's dollar bears give.

But if fundamentals controlled, the dollar would have plummeted by now, given no private savings in the US in 2005, budget deficit un-reined with no prospect of control, costly war(s) occurring and in the offing, and trade deficit increasing not improving. Plus, just yesterday, yields on JapGovtBonds rose, striking a new note on the latest dollar bearish theme, which is expectation of Japenese interest rate hike.

If carry trade/pro dollar paradigm was teetering, the cluster of above events would have killed it. But, as yet, no stake has found its heart.

 

Chood,

I totally agree that long-term fundamentals are sitting in the back seat for now and will eventually roar back with a vengeance. Clearly the interest rate backdrop has supported USD vs. JPY in 2005.

Even if the dollar does drop, I don't see the yen being the main beneficiary. With the demographics, political battles between govt. and BOJ and an economy heavily reliant upon exports, I don't understand why people are so bullish on the yen.

But if she starts to go up, I'll have to forget about my opinions and jump aboard.....

 

Anyone shorting here, below the breakout of 117.08?

 

Is this a head n shoulders formation. Left shoulder formed around the 6th march. With the neckline at 117.08.

Or am i seeing things?

 

I guess it was a double top. 1.155 minimum now.