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USD/JPY Discussion

  • #25,201
  • Aug 1, 2011 2:41pm Aug 1, 2011 2:41pm
lol @ the BOJ intervening
  • #25,202
  • Aug 1, 2011 2:59pm Aug 1, 2011 2:59pm
Quoting Wulfgar
lol @ the BOJ intervening
Not as laughable as the Federal Reserve's Quantitative Easing 2. That was the definition of 'useless'.
  • #25,203
  • Aug 1, 2011 3:15pm Aug 1, 2011 3:15pm
Quoting Unknownpips
Actually, leaders from Europe and USA spoke to Japanese counterparts on the intervention. So it may be more than just Japan involved once again on the sell-off. It is actually quite scary for Japan's future prospects as a major exporting country if their currency continues to strengthen in these economic conditions (US debt, European debt etc).
Sounds good. Looking forward to the action from the comfort of my armchair.


Quoting fosking
Owned as in we are seeing all time lows again shortly after?

KillerWhale is right, there will be no pre-announcement. The Japanese know the situation is to do with outside forces and not Japans. Thus making any intervention pretty much pointless as all the others have been before. Sure it will shake out some of the weaker shorts, but those serious won't exactly be quaking in their boots.

Please also remember that the coordinated weakening of the Yens only goal was to bring the price back up to pre-quake levels and nothing more. They won the...
While I see your point, the simple fact that you don't know how much more expensive yen would be right now, without any historic intervention whatsoever, negates any absolute guarantee of yentervention being confirmed as 'useless'.
  • #25,204
  • Aug 1, 2011 3:30pm Aug 1, 2011 3:30pm
up or down?
  • #25,205
  • Aug 1, 2011 3:37pm Aug 1, 2011 3:37pm
Quoting CoffeeGamble
While I see your point, the simple fact that you don't know how much more expensive yen would be right now, without any historic intervention whatsoever, negates any absolute guarantee of yentervention being confirmed as 'useless'.
Although it would certainly make for an interesting discussion on what may or may not of happened without yentervention (love that!), I don't see how it is at all relevant?
The simple fact is, Japan has now intervened on several occasions and all have failed.
The only way one can see these actions as useful instead of useless, is if you believe stalling price and even consolidating to a certain extend before a continuation of the down move a success.
I don't seen how this benefits anyone except the Big Boys and other countries trying to achieve the same weakening goals as Japan to keep export competition to a minimum.
  • #25,206
  • Aug 1, 2011 3:43pm Aug 1, 2011 3:43pm
Quoting fosking
I don't seen how this benefits anyone except the Big Boys and other countries trying to achieve the same weakening goals as Japan to keep export competition to a minimum.
That may be so, but the fact is Japan (Noda) has indicated that the market is being watched very closely. They are obviously on alert for some reason and time and again they have stated they are afraid of what strengthening Yen will do for their economy.

It is a foregone conclusion therefore that should the Yen strengthen further than a certain threshold beyond which it would be catastrophic, Japan and perhaps other countries will intervene. What the long term fallout of the intervention is irrelevant on the basis that it may take a while for the JPY to strengthen again.

After the tsunami, there was major Yen buying and within 1 day there was more than 800pips swing north and south. Afterwards JPY continued to weaken and weaken until the Euro and more recently the US debt came under the spotlight.

So to say that an intervention achieves nothing is a fallacy; the only reason why the JPY continued strengthening as of late was due to global uncertainty - blame Europe and USA for failing as politicians.
  • #25,207
  • Aug 1, 2011 3:44pm Aug 1, 2011 3:44pm
Quoting fosking
Although it would certainly make for an interesting discussion on what may or may not of happened without yentervention (love that!), I don't see how it is at all relevant?
The simple fact is, Japan has now intervened on several occasions and all have failed.
The only way one can see these actions as useful instead of useless, is if you believe stalling price and even consolidating to a certain extend before a continuation of the down move a success.
I don't seen how this benefits anyone except the Big Boys and other countries trying to achieve...
As you have previously stated yourself, not all occasions have failed. You admitted the intervention to relieve stress on the economy in the direct aftermath of the disaster was a battle won by the central bankers. Yes, we are back to previous levels, but don't act like zero Japanese took advantage of the weakness in yen after the G20 actions.


Quoting Unknownpips
That may be so, but the fact is Japan (Noda) has indicated that the market is being watched very closely. They are obviously on alert for some reason and time and again they have stated they are afraid of what strengthening Yen will do for their economy.

It is a foregone conclusion therefore that should the Yen strengthen further than a certain threshold beyond which it would be catastrophic, Japan and perhaps other countries will intervene. What the fallout of the intervention is in the long term is irrelevant on the basis that it may take a while for the JPY to strengthen again.

After the tsunami, there was major Yen buying and within 1 day there was more than 800pips swing north and south. Afterwards JPY continued to weaken and weaken until the Euro and more recently the US debt came under the spotlight.

So to say that an intervention achieves nothing is a fallacy; the only reason why the JPY continued strengthening as of late was due to global uncertainty - blame Europe and USA for failing as politicians.

Exactly, that's the point spot on.
  • #25,208
  • Aug 1, 2011 3:48pm Aug 1, 2011 3:48pm
UJ little to volatile for me lately.
Waiting for the dull, trend-less, ranging periods this pair loves so much before entering scalp-heaven again

Can't see any big changes getting this trending either way for now....
Don't be a hero. Don't have an ego. Always question yourself
  • #25,209
  • Aug 1, 2011 3:52pm Aug 1, 2011 3:52pm
We just completed a sneaky 100pip retrace from the fresh new low of 76.29.
Whoever picked the bottom it was a nice trade, expecting any further advance?
Maybe up to 77.350 the 61.8% fibo of Monday hi-lo.
Don't get mad, get even!
  • #25,210
  • Aug 1, 2011 3:53pm Aug 1, 2011 3:53pm
Quoting CoffeeGamble
Not as laughable as the Federal Reserve's Quantitative Easing 2. That was the definition of 'useless'.
wait till qe3...
  • #25,211
  • Aug 1, 2011 3:54pm Aug 1, 2011 3:54pm
Quoting stulic
We just completed a sneaky 100pip retrace from the fresh new low of 76.29.
Whoever picked the bottom it was a nice trade, expecting any further advance?
Maybe up to 77.350 the 61.8% fibo of Monday hi-lo.
Looking for a break above 77.75 for any indication of it having a rebound. Who knows whats in store now - vote postponed till tomorrow...
  • #25,212
  • Aug 1, 2011 3:56pm Aug 1, 2011 3:56pm
Just in:


NEW YORK (Dow Jones)--With the dollar getting within a hair of its all-time nadir against the yen Monday, traders have turned their attention from the debt dispute in Washington toward the threat of yen-weakening intervention.

With the dollar last quoted at Y77.23, after falling as low as Y76.29 intraday-- just above the all-time low of Y76.25 hit in mid-March--many traders are questioning when and how--not if--Japanese officials will intervene to weaken their relentlessly rising currency.

The range of "Y75-Y77 is [the] intervention zone," said Jens Nordvig, head of G10 foreign exchange strategy at Nomura Securities in New York.

Japanese news agency Nikkei reported Monday that the Ministry of Finance is readying for intervention while the Bank of Japan has begun discussing additional monetary easing measures, which might also weaken the yen.

Senior Vice Finance Minister Fumihiko Igarashi said the Japanese government "will have to see what kind of measures the BOJ comes up with" in a regular two-day policy meeting ending Friday, before deciding on additional foreign exchange measures on its part. Many Japanese companies have complained that the strong yen undermines their competitiveness and as a result, a number have decided to relocate operations offshore.

Even if the Ministry of Finance says it's deferring to the BOJ before making a decision, traders aren't taking for granted the possibility that the Ministry moves sooner. And the best guess, many say, is that Japanese officials pull the trigger sometime after U.S. lawmakers approve a resolution to raise the debt ceiling, expected Monday. That's because the dollar could be the recipient of a small boost as bulls breathe a sigh of relief that a U.S. fiscal disaster has been averted. And Japan's Ministry of Finance would get more bang for its intervention buck by hitching a ride on the coattails of a rebounding U.S. currency, analysts say.

Indeed, timing and strategy will be all the more important this time, many say. That's because the Japanese government is expected to be on its own--unlike during the concerted intervention that occurred in mid-March, when Group-of-Seven central banks joined with Japan to sell yen in the aftermath of the Sendei earthquake and tsunami. Unilateral intervention tends to have a lower success rate than coordinated efforts.

But unilateral intervention won't be easy, not when the risk of a downgrade to the United States' "AAA" rating threatens to keep weakening the dollar. Japanese officials "have to be prepared to do several rounds to convince the market that they are determined to fight the appreciation pressures," said Steven Englander, head of G10 strategy at Citigroup in New York.

-By Andrew J. Johnson, Dow Jones Newswires; 212-416-3092; [email protected]


(END) Dow Jones Newswires

August 01, 2011 16:55 ET (20:55 GMT)
Don't get mad, get even!
  • #25,213
  • Aug 1, 2011 3:57pm Aug 1, 2011 3:57pm
Quoting Wulfgar
wait till qe3...

Oh yes, really looking forward to that. It would be an epic fail to see the Fed create their own lost decade of low interest rates, eventually becoming too scary to ever raise.
  • #25,214
  • Aug 1, 2011 4:16pm Aug 1, 2011 4:16pm
Quoting fosking
Please also remember that the coordinated weakening of the Yens only goal was to bring the price back up to pre-quake levels and nothing more.
Here is my quote.
My words have been twisted slightly I feel as I made it clear the reasons why the coordinated yentervention took place, which after all was a favor to Japan from fellow countries on the back of the terrible earthquake. At no other point has there been a coordinated intervention. Only Japan acting for it's own needs. Which all times has been slapped back down.


Quote
So to say that an intervention achieves nothing is a fallacy; the only reason why the JPY continued strengthening as of late was due to global uncertainty - blame Europe and USA for failing as politicians.

And the circle is complete. Check out my earlier posts on why a Japanese yentervention is unworkable due to outside factors.
(and to the first part of the sentence, it clearly hasn't achieved anything has it as we are still at the lows.)

I think what's even more important in this USD/JPY discussion is the fact the USD is so weak. We can talk until we are blue in the face about Japan and the Yen. but until the USD stops it's decline the USD/JPY will follow.
  • #25,215
  • Aug 1, 2011 4:27pm Aug 1, 2011 4:27pm
Quoting fosking
I think what's even more important in this USD/JPY discussion is the fact the USD is so weak. We can talk until we are blue in the face about Japan and the Yen. but until the USD stops it's decline the USD/JPY will follow.
Well I agree with that much, the whole problem is the weak recovery (shrinking GDP even) and the surrounding debt issues. However, you have to look at the broader picture. Spending power is also important to growth - which is why it is absolutely necessary that the dollar is stronger against its major trade partners in the interim. JPY must weaken against the USD for the benefit of both Japan and USA.
  • #25,216
  • Edited 4:47pm Aug 1, 2011 4:35pm | Edited 4:47pm
Quoting fosking
Here is my quote.
My words have been twisted slightly I feel as I made it clear the reasons why the coordinated yentervention took place, which after all was a favor to Japan from fellow countries on the back of the terrible earthquake. At no other point has there been a coordinated intervention. Only Japan acting for it's own needs. Which all times has been slapped back down.




And the circle is complete. Check out my earlier posts on why a Japanese yentervention is unworkable due to outside factors.
(and to the first part of the sentence,...

What you are doing is waiting for price to return to certain level to support your argument and saying that everything before that was irrelevant, as the Japanese are obviously only allowed to do business at this price level. You conveniently ignore the large spike in USDJPY to claim that yentervention skeptics were right.

The bold part is the key.

Quoting Unknownpips
That may be so, but the fact is Japan (Noda) has indicated that the market is being watched very closely. They are obviously on alert for some reason and time and again they have stated they are afraid of what strengthening Yen will do for their economy.

It is a foregone conclusion therefore that should the Yen strengthen further than a certain threshold beyond which it would be catastrophic, Japan and perhaps other countries will intervene. What the long term fallout of the intervention is irrelevant on the basis that it may take a while for the JPY to strengthen again.

After the tsunami, there was major Yen buying and within 1 day there was more than 800pips swing north and south. Afterwards JPY continued to weaken and weaken until the Euro and more recently the US debt came under the spotlight.
You could argue that the BoJ, without external assistance, will be countered immediately, yes. We'll see about that.

What I won't forget is how many of these so-called "experts" claimed the market would beat the concerted efforts, until central bankers wiped the floor with them.
  • #25,217
  • Aug 1, 2011 4:35pm Aug 1, 2011 4:35pm
Quoting Unknownpips
Well I agree with that much, the whole problem is the weak recovery (shrinking GDP even) and the surrounding debt issues. However, you have to look at the broader picture. Spending power is also important to growth - which is why it is absolutely necessary that the dollar is stronger against its major trade partners in the interim. JPY must weaken against the USD for the benefit of both Japan and USA.
I agree

So after the honeymoon period of the debt ceiling being raised, it will be back to selling the USD again as the US digs itself into an even bigger hole?
  • #25,218
  • Aug 1, 2011 4:53pm Aug 1, 2011 4:53pm
Strong buying at the beginning of Sydney open.
  • #25,219
  • Aug 1, 2011 5:08pm Aug 1, 2011 5:08pm
Quoting CoffeeGamble
You conveniently ignore the large spike in USDJPY to claim that yentervention skeptics were right.
Come on CoffeeGamble, if you are referring to the spike in march after we dropped through the all time low, the bounce was inevitable as all stops were cleared. Theres no more buyers so run into the sellers instead. This is basic trading. And once this "spike" popped up it was sold into.

The USD/JPY has been in decline since the start of the financial crisis. All attempts to halt the decline have failed and we've just made another new low. The interventions on the way down have been nothing but blips. To say they have been successful in the grand scheme of things is simply wrong and the charts proves it. This isn't my opinion, just look left and you will see for yourself.
  • #25,220
  • Aug 1, 2011 5:43pm Aug 1, 2011 5:43pm
Quoting Brb-Fraudin
Strong buying at the beginning of Sydney open.
To drive it to supply for another sell off. I see nothing on the charts that indicate a turn nor as fosking stated from a fundamental point of view. If people want to buy it because it is 'cheap', then I won't stand in their way, as after all it is their money. Same with the Swissy. I will wait for the market to show its hand before I start longing either pair.
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