USD/JPY Discussion

time to bye

I will wait when opens NY session

Bought at 104.80 still holding ... hope it will go above 105.50 and break 105.70 hrly resistance.. then the target will be 106.90...

A lot of uncertainty anyway i've adjust my stoploss to 104.95 a free trade...

Lets see what happen!!!

This morning 15 sept. 08)and weekend the JPY/USD has risen significantly due to the crises with Lehman and Merrill-lynch. Usually one thinks of the Swiss Franc as a safe haven.

But as WSJ has said: "The Japanese yen, which has traded closely in line with risk-aversion levels, soared and remains 2.7% higher against the U.S. dollar at 105.01 yen. The Japanese unit gained 2.7% to 149.49 yen versus the euro."

Would someone explain to me why the Yen is considered in line with 'risk aversion'? Thanks.

The market is really humbling. I've been short since 105.10 about after news of the Lehman brothers bankruptcy and am now deeply in the negative. I should have waited for a break with a close below 105 on the daily chart. I would have thought there would have been risk aversion and a huge flight for low risk assets such as the yen. But I was wrong.

The yen is the premier carry trade currency, its interest rate is 0.5%. I copied this from dailyfx for you

What is a Carry Trade
All that is needed to understand the carry trade concept is a basic knowledge of foreign exchange and interest rates differentials. Each currency has a different interest rate attached to it determined partly by policy authorities and partly by market demand. When taking a foreign exchange position a trader holds long position one currency and short position in another. Each day, the trader will collect the interest on the long side of their trade and pay the interest on the short side. If the interest rate on the purchased currency is higher than that of the sold currency, the result is a net inflow of interest. If the sold currency’s interest rate is greater than the purchased currency’s rate, the trader must pay the net interest.

So

In order for money managers to benefit from the interest rate difference they have to be long on the USD/JPY. But as the market becomes unstable, they guys being risk averse, start unwinding their long positions to protect their gains. As they unwind the yen strengthens because there is less buying pressure on any of the yen cross pairs and they selloff

food for thought...
Stock index futures tumbled on Monday as the bankruptcy filing by U.S. investment bank Lehman Brothers and cascading fears about the stability of other major financial institutions rattled global markets.

The slide in equity futures suggested that major Wall Street indexes were likely to slump 3 percent or more at the market's open. The diminishing appetite for risk drove investors toward the relative safety of government debt.

this definitely does not bode well for carry trades, or yen crosses..so i shall be looking for short entries only..euro/usd looks weak too after an impressive rally started last friday..

Someone tell U/J the US is having a bad day, it won't listen to me

Down boy, Down!

If I am not mistaken, it still has a gap to fill.

Gap filled last night

look at the weekly (for swing / trend traders) .. nothing can be more technically clear that its going to go down - doji, hanging man formation - classical text book example.

Be nice to see 103 this week

http://1.bp.blogspot.com/_nmIuQsC9b-...D_JPY+Spot.png

We're hitting 100! If no cut tomorrow, we may hit it then.

going to sell usd/jpy for target of 103.50 .. stoploss at 104.50

I'm start thinking to go long on USDJPY.

Got into the ride 10387 looking for TP 10493

Short @ 104.25 target 103.25...

anyway going to observe price action when US open.

closed @103.80 lets see the next move

It's a maelstrom out there