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> (hope you can read the link )
You can't but you can.
(summary of articles on Japan at the RGE site)
Japanese Yen Outlook: Global Risk Aversion Making Yen a Star Performer
Falling commodity prices and risk aversion, not economic
fundamentals, is behind the yen's resilience
Oct 24: Yen hit 13-year highs against the dollar, reaching 93.18, and
a six-year peak against the euro as panic gripped global markets and
forced investors to abandon risky positions
Week of Oct 6-10: Yen posted its biggest weekly gain versus the
dollar (4.4%) in a decade as global stock rout prompted investors to
reverse carry trades - sell higher-yielding assets and pay back low-
cost loans in Japan. USD/JPY fell to 97.92 yen, strongest since Mar 19
Sasaki of JPMorgan (via Bloomberg): Yen may advance to 95 per USD
should Japanese investment trusts, insurance companies and pension
funds start selling foreign holdings
Halpenny of Mitsubishi UFJ (via Bloomberg): Yen won't likely be
harmed by global efforts to revive financial markets; 45% decline in
Japan's Nikkei 225 index in past 12 months (to mid-Oct) has been more
severe than U.S. or European markets, leading to reduced risk
appetite within Japan and to new repatriation of assets
Yen typically strengthens as global risk aversion rises - 1) yen seen
as a relative safe haven currency due to Japan's low inflation and
trade surplus; 2) Japan has very low interest rates, making yen
perfect for "carry trade", in which investors borrow money in a low-
yielding currency to invest in a higher-yielding asset. When aversion
rises, investors buy back yen they have borrowed
CIBC: While yen appreciation is a negative for Japan's export sector,
yen is still much weaker than it was prior to the summer of 2006 on a
trade-weighted, real exchange rate basis
While USD/JPY can spike lower in times of extreme risk aversion, it
cannot stay below 100 for long due to Japan's declining financial
home bias; 110 for USD/JPY makes more sense than 90 (Jen)
Unicredit: Fair value for USD/JPY is 102 but risk aversion to keep
JPY overshooting
JPY/USD may fall below 100 in event of a dollar crisis, but won't
stay there in the long-term due to 1) economic decline from
demographic shift, 2) large interest rate gap, 3) yen failing to
become key reserve currency, 4) declining home bias of baby boomers
(Mitsubishi UFJ)
--- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@xxx> wrote:
>
> > and probably Japanese Yen remaining the strongest currency for
> >months to come.
>
>
>
> The crisis was mainly a technical one that most of us wouldn't have
> known anything about, if we had left the TV off, except for the
> barometer of the market, where necessary selling has made us all
too
> aware of the clear and present danger.
>
> Basic human nature, and peoples primal responses, were, as always,
> grossly underestimated.
>
> IMO the strength of the Yen and the USD is primarily based on a
> return of capital to home soil... when we get hurt playing in the
> yard we run to mother.
>
> If I am correct then it won't last.
>
> I put more weight on local opinion and in this case the locals
agree:
>
> - from RGE monitor
>
> http://www.rgemonitor.com/404
>
> (hope you can read the link - I am logged in as a subscriber so it
> might not be a public article).
>
> JPY/USD may fall below 100 in event of a dollar crisis, but won't
> stay there in the long-term due to 1) economic decline from
> demographic shift, 2) large interest rate gap, 3) yen failing to
> become key reserve currency, 4) declining home bias of baby boomers
> (Mitsubishi UFJ)
>
> from a NewYork bank article:
>
> it was very noticeable that, as the March low in USD/JPY was
finally
> broken this morning, Economics Minister Kaoru Yosano told a news
> conference that it is desirable for currencies to reflect Japan's
> economic fundamentals. Although he did his best to sound sanguine
> about the situation ("I don't think the current volatility in stock
> and currency markets will last so long"), this does sound like the
> first sign that the Japanese authorities are starting to become
> concerned about the continued strengthening of the JPY.
>
> Not a good article but I emphasis the ministers opinion that the
> volatility won't last long.
>
> The emphasis on Japanese government action is the authors although
> one does wonder what their thinking is on the subject and whether
> they are likely to act.
>
> Japan has been running current account deficits for a while and has
a
> penchant for foreign investment ... I believe the FX rate is mainly
a
> result of repatriation.... how long can that go on for.
>
> Countries that have been running current account deficits are
amongst
> the leaders on the FX decliners board (AUD, GBP, NZD, CAD) ... the
US
> is the exception there but the migratory habits of their companies,
> especially financials (who have been forced to repatriate?) could
> have increased demand for the US in the short term ... if I am
> correct then the USD won't hold up either.
>
>
> > Now EBC funds still at 3.75% ? They are going to cut fast, much
> >faster than FED, IMHO.
>
> I am not certain that central banks will pull the interest rate
> lever ... the US can't go any further and how effective will it be
> (probably counter productive) ... pump priming is more likely ...
Aus
> has already gone down that path.. Euro to follow.
>
> The other point is that this is a huge strain on Euro ties ...
> responses will not necessarily be central.
>
> As an aside Hungary increased rates to 11% today??? to stablise
their
> currency.
>
> There is some talk around about repegging currencies to Central
Bank
> settings and also some grand world wide 'new monetary order'.
>
>
> > If situation evolves in that direction we are going to see EURUSD
=
> >1.0 soon
>
> These cliched round numbers still seem to hold sway ... it didn't
sit
> right with me that the AUS would ever reach parity with the USD and
> it burnt out at around 98cents .. . can you see Euro parity ... it
> might be a bridge to far.
>
> Anyway these are interesting times and who can predict anything.
>
> I am just a boring old reactive trader.
>
> It is fun to speculate and good to exercise the guessometer but I
> wouldn't put money on it.
>
> brian_z
>
>
>
> --- In amibroker@xxxxxxxxxxxxxxx, "Tomasz Janeczko" <groups@>
> wrote:
> >
> > Hello,
> >
> > Did you see this daily effective FED rate chart:
> > http://www.newyorkfed.org/charts/ff/
> >
> > Usually effective rate follows closely target rate (currently at
> 1.5%)
> >
> > In recent days effective FED rate dropped below 1%.
> >
> > It looks to me that FED is going to be walking in footsteps of
> Japan central bank in '90s.
> >
> > Now EBC funds still at 3.75% ? They are going to cut fast, much
> faster than FED, IMHO.
> > If situation evolves in that direction we are going to see EURUSD
=
> 1.0 soon
> > and probably Japanese Yen remaining the strongest currency for
> months to come.
> >
> > Any thoughts?
> >
> > Best regards,
> > Tomasz Janeczko
> > amibroker.com
> >
>
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