USD/JPY Discussion

This is my 1st post on this site and im really liking the talk on here

That article is really good.
So in a sense the USDJPY has come to the bottom level (not saying it wont drop far lower technically). Fundamentally that is, as Japan cant afford to function as a country if their currency appreciates much further.

So if Japan utilise 195 Trillion Yen to devalue the currency, how much is that in comparison to 31 October.

recent view on yen..

I have no idea, perhaps anyone else has the numbers on hand. Theoretically speaking this number is of no importance as the Boj has access to printing pressses ;-)

What they should do, or could do is to not wait until price is back at or below pre intervention level but to use the momentum to the fullest. Make it crystal clear that they are to be taken seriously in their quest to fight an appreciating Yen.

All they are doing now is running behind the facts, over and over again. Just like the EU, it all started with a tiny problem (Greece) which represents less than 3% of the EU economy and it now has spread to major EU countries.

It turned out to be not only an ineffective way of tackling problems but also a very expensive one ! One that gets more expensive every day they fail to act forcefully.

Another good read, (in my humble opinion that is):



DJ IMF CONDUCTS STRESS TESTS ON JAPANESE BANKS
JANUARY 5, 2012
By TAKASHI NAKAMICHI

TOKYO (Dow Jones)--The International Monetary Fund is conducting stress tests on Japanese banks to gauge how vulnerable they are to a potential drop in the value of their huge holdings of Japanese government bonds, people familiar with the matter said, a move that could sharpen investors' focus on another aspect of the risk posed to Japan's economy by its ballooning debt.

Credit ratings firms, investors, and even Japan's central bank governor have expressed concerns about the growing debt, now equal to about twice the country's annual economic output, but much of the attention has been on the government's ability to sustain its large budget deficits.

The IMF's tests may shed more light on another danger: the massive exposure of the Japanese financial system to JGBs and how much damage a rise in bond yields could inflict on Japanese banks. This comes as governments around the world are particularly sensitive to the financial-system and fiscal vulnerabilities, in light of the euro-zone debt crisis.

The stress tests will be the first since 2002-2003, when the IMF conducted its first close inspection of Japan's banking system under its Financial Sector Assessment Program. Japan isn't being singled out; the U.S., Germany and the U.K. have also been subject to similar FSAP examinations, one of the people said.

"This is what needs to be done. This is being conducted in other nations as well," the same person said.

The outcome may be made public in July together with the results of separate annual policy consultations between the fund and Japanese policy-makers, the people said. Japan can require the IMF to keep the results private.

Japan's case could attract attention. The sovereign debt crisis ravaging the euro zone has underscored the risks to European banks from their holdings of government bonds. JGB prices have so far shown no signs of weakness, with 10-yield yields now below 1%. But if yields rise, JGBs prices would fall, potentially forcing banks to write down their holdings and take hits to their capital.

Since the early 2000s, Japanese banks have increased investment in JGBs for lack of other profit-making opportunities amid Japan's ever-sluggish economy. Japanese banks held Y383.911 trillion, or roughly 39%, of outstanding JGBs, including short-term debt and government-guaranteed debt, as of Sept. 30, according to Bank of Japan data. That is equivalent to about 25% of their total assets.

A BOJ report on the financial system in October indicated major banks could sustain capital losses worth about Y3.4 trillion and regional banks losses of Y2.8 trillion if bond yields were to rise by a one-percentage point across the curve, pushing down prices of their bond holdings.

"Within both major and regional banks, the risks associated with bond investment have clearly increased," the BOJ report said.

Japanese interest rates could eventually rise if the government fails to get a grip on its budget deficits, analysts say. Public debt has grown to more than 200% of gross domestic product from around 150% in 2003, higher than any other major industrialized nation, including debt-crisis-hit European economies.

Closer scrutiny of the dangers posed by Japan's debt problem may add to pressure on the government, which continues to fund more than half of its spending through debt. The government aims to double the 5% sales tax by 2015 to help mend its finances, but the nation's political gridlock has kept the outlook for the tax plan foggy.

Since late last year, discussions on the stress tests have been under way between Japanese and IMF officials, such as over what economic conditions they should assume in measuring risks of banks' exposure to JGBs, one of the people said. The IMF's mission team plans to visit Japan in March for the tests, and the whole process is likely to be completed by July.

As in the previous test nearly a decade ago, the IMF is looking at major banks as well as regional banks, the people said. It is also examining Japan Post Bank, one of the biggest single investors in JGBs.

The results will depend on assumptions used, such as how quickly JGB yields could rise. Some finance ministry officials say the pace of any JGB yield gains could be slow as it wouldn't be easy for investors to shift such huge amounts of money quickly into other assets. But analysts warn moves could be abrupt, as illustrated by the rapid rises in Italian government bond yields in recent months.

Few economists expect Japan to fall immediately into a crisis similar to Europe's. More than 90% of JGBs are held by Japanese investors. Japanese private-sector savings, for now, is also enough to absorb the government's debt sales.

But if Japan's current debt trajectory continues, it could become harder for the government to maintain such stability in the JGB market.

Standard & Poor's cut Japan's credit rating by one notch to double-A-minus last January, the first downgrade for Japan since April 2002, and has a negative outlook on the rating. Moody's Investors Service has a stable outlook on its Aa3 rating on Japan.

The IMF in November warned in a report that "Should JGB yields rise from current levels, Japanese debt could quickly become unsustainable."

i have read the statement before....i think they will release it as soon as posible...or maybe in feb i think...

Releasing numbers is one thing, having an effect is something else. For the time being it is still more profitable to invest in Jpy bonds than in Us bonds due to eg low inflation.

looks like a good short @ 77.22 imo
target about 15 to 18 pip profit

short @ 77.19. this should be a nice little fade

short? dont think so...will consider under 76.50 if u want..

do you know what a fade is?

Good day all! Betting against any foulplay..

Short @ 77.20 GL

Snb vs Boj .... yes they can. Question is do they have the guts ?
Show guts or see industry move abroad/go belly up. What a hartbreaking choice ;-)

Ghosn expects growth in '12 but urges more work on yen

By SAYO SASAKI
Kyodo
Nissan Motor Co. President Carlos Ghosn expects Japan to grow in 2012 on recovery from last year's devastating tsunami, although he cautioned that curbing the yen's strength is crucial since it is already resulting in job losses and a hollowing out of industries.



"In 2012, we will see a rebound compared to 2011 because 2011 has been such a terrible year," Ghosn said in an interview, referring to the March 11 earthquake and tsunami that ravaged northeastern Japan, disrupted global supply chains and crippled the output of Japanese manufacturers, including the automakers that have been leading the nation's economic growth.

Saying Japan has everything necessary for growth in the coming years, such as great infrastructure, advanced technology and abundant capital, Ghosn stressed Japan now needs to focus more on policies that help its industries to grow.

"Make sure that there's more willingness to focus the policy toward growth, which means, obviously, supporting investments to new technologies and supporting the exporters," he said, adding that he wants to see the currency in a "neutral position."

Amid worries about the course of the global economy, the yen, considered a relatively safe asset, has advanced to historically high levels against the dollar and the euro in recent months, eating into Japanese exporters' profits overseas when they are repatriated.

Noting the yen at such levels to the dollar is a struggle for many exporters, Ghosn said he is worried that Japanese companies do not voice their concern but react instead.

"What worries me is that Japanese companies have a tendency not to whine. They just act, so they are shifting production outside, they are doing everything, and (in) the end, we are losing a part of the Japanese society."

Calling the Japanese currency "artificially strong," Ghosn reiterated his call on the Japanese authorities to take action against the appreciation of the yen, noting how Switzerland conducted unlimited intervention in the currency market to stem a similar upsurge of the Swiss franc against its major counterparts.

"Some people say there's no solution. Well, I look around and I see that the Swiss have solved their problem very well, and Switzerland doesn't have the power of Japan, by no means," he said.

Looking back at the past year, he said the global economy was relatively strong although it had two sour spots — Japan, because of the disaster and the strong yen, and Europe, because of its financial crisis.

Haha..i know..but everything i had said in the chart..

Sigurs

like i said before many investor hold the yen more than chf holder..

Japan Fin Min Azumi: To Discuss Europe Crisis With Geithner

Japan Fin Min Azumi: Watching Forex Market Carefully

yes finally he said that!

Japan Fin Min Azumi: Must Watch Forex Market From Long-Term Perspective

long usdjpy @ 77.189

JAPAN FINMIN AZUMI - WANT EUROPE TO DISCUSS FUNDING SHORTAGES IN ITS BANKING SECTOR AND TAKE NECESSARY ACTION

JAPAN FINMIN AZUMI - EURO'S DECLINE IS HAVING A BIG IMPACT ON JAPAN'S EXPORTS, WATCHING CURRENCY MOVES CLOSELY


I think he is to consider to sell yen againt eur soon

Yes he is watching again.intervention should be resurface again soon

BOJ Shirakawa To Visit Switzerland, London On Jan 7-12

the time same with noda n azumi visting US..should be a hint