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Trading JPY pairs

  • #1
  • First Post: May 16, 2006 10:16am May 16, 2006 10:16am
So many people avoid trading the JPY pairs. They say that is because of the manipulation by BOJ. I noticed that others do not shy away from the pairs. Even Vegas himself has stated he does not trade USDJPY. Is there some problem with the pairs? I have traded them before, for a few years, with good success, but now I am wondering if I have just been lucky.

I just wanted to know your thoughts on the pairs...
  • #2
  • May 16, 2006 12:00pm May 16, 2006 12:00pm
BoJ is indeed tricky and takes a more active role in the markets than other central banks in order to keep the Yen where they moreless want it to be according to their needs. That being said, I do trade the Yen.
  • #3
  • May 16, 2006 2:45pm May 16, 2006 2:45pm
regarding the usd/jpy which I have been trading every now and then I can say that yes it is tricky....well saying that it is trickier when the pair is going to unwanted levels of BOJ and Mr Tanigaki....that happened recently aswell when u see the trend or the fundamentals and u see the pair struggling to go in any direction because of comments of BOJ members.....

having said that, I do find usd/jpy good pair to trade but it seems that it is open to manipulation more than the other pairs...so one thing is for sure I try to close my positions for sure before weekend as it almost always opens on monday with a big gap......(due to something that someone said most of the times)
  • #4
  • May 16, 2006 5:29pm May 16, 2006 5:29pm
I trade the Yen consistently, exactly the same way as I do any pair and to be honest, I don't find any difference. The BOJ may well manipulate the pair, but really, tell me a currency that isn't moved around with subtle comments from people with a vested interest.

For me the Yen obeys the same technicals as does any other pair (well sometimes ).
You can quit and they won't care, but you will always know.
  • #5
  • May 16, 2006 5:32pm May 16, 2006 5:32pm
the BOJ does have a huge influence over the yen. most technical traders avoid it because it behaves so oddly. i hardly trade the yen on my mechanical systems. but when it comes to the fundies, the yen is my favorite! anytime there is someone influencing a currency its easier to predict the market. there was a guy in market wizards1, i forget his name, but he taught me this. anybody know who im talking about or do i need to go dig this up?.
Relax and be happy.
  • #6
  • May 16, 2006 5:45pm May 16, 2006 5:45pm
Ya agreed...We all know that the BOJ wants a weak Yen, while fundamentally it should be strong, just bet against them in extremes and that's it, you will make money easier than any other pair....

I actually see that the USD/JPY pair is one of the clearest pairs to trade fundamentally over the long term...At least you know one of the big players who move the market once every now and then, better than other pairs that move strangely while you don't know who is doing what & why??? We know the intentions of one of the biggest players of the pair, isn't this great??


Thanks,

Nader
  • #7
  • May 16, 2006 6:20pm May 16, 2006 6:20pm
The BOJ hasn't taken a personal hand in the currency for several years. The BOJ makes comments, and sometimes it has an effect, but most of the manipulation is done by quasi-governemnt agencies. It's much cleaner for them...

Granted, knowing that doesn't change much, the pair is still prone to manipulation. What's useful is that Thomson is kind enough to notify you when their buying.
  • #8
  • May 16, 2006 6:24pm May 16, 2006 6:24pm
Do you feel that this type of fundamental manipulation applies for all the JPY pairs our do you feel it is most prevalent in the USDJPY, because of the trade relationships the two countries have?
  • #9
  • May 16, 2006 6:34pm May 16, 2006 6:34pm
Quoting smjones
Do you feel that this type of fundamental manipulation applies for all the JPY pairs our do you feel it is most prevalent in the USDJPY, because of the trade relationships the two countries have?
It's exclusively in the USD/JPY. Given the nature of the relative values across currency pairs, it would be impossible, and unnecessary to independantly manipulate the others.

There is a simple mathmatical relationship between usd/jpy, eur/jpy, and eur/usd. If they drive the value of usd/jpy in their favor, the arbitragers will pull eur/jpy along for the ride. It's the same with cable, chf, etc...
  • #10
  • May 16, 2006 6:43pm May 16, 2006 6:43pm
Quoting Darkstar
The BOJ hasn't taken a personal hand in the currency for several years. The BOJ makes comments, and sometimes it has an effect, but most of the manipulation is done by quasi-governemnt agencies. It's much cleaner for them...
yes your right, i am being too broad by saying the BOJ. its actually the government that wants the currency to do this or that, and their cronies do the dirtywork...
Relax and be happy.
  • #11
  • May 16, 2006 7:09pm May 16, 2006 7:09pm
This is an interesting thread as i've not traded the JPY out of self imposed fear from my reading. . . but a Pip is a Pip no matter where it comes from so i'm all ears.

That said i have a Q. Nader, you stated:
Quoting narafa
Ya agreed...We all know that the BOJ wants a weak Yen, while fundamentally it should be strong, just bet against them in extremes and that's it, you will make money easier than any other pair...Nader
Could you enlighten me a bit more on the above concept? When you stated "just bet against them" were you talking about betting against the "fundamentals"? And then how so?

Also, in this case, how would you typicaly define an "extreme"? Maybe the outer levels of say the VWBDaily models? Or swing high/low fibo extensions/retracements.

Thanks in advance for any reply.
Thom
  • #12
  • May 17, 2006 12:16am May 17, 2006 12:16am
Quoting accrete
That said i have a Q. Nader, you stated:
Could you enlighten me a bit more on the above concept? When you stated "just bet against them" were you talking about betting against the "fundamentals"? And then how so?

Also, in this case, how would you typicaly define an "extreme"? Maybe the outer levels of say the VWBDaily models? Or swing high/low fibo extensions/retracements.

Thanks in advance for any reply.
Thom

Go with the fundamentals for sure because they are going to win at the end of the day...If the Japanese government wants a weak yen to support their exports and make them cheaper and they interven in the currency markets to pressure the yen down against the USD, and at the same time the fundamentals are suggesting a stronger yen because the japanese economy is inflating, they sure go against the japanese government in the extremes, you will take some money out of their pocket for sure....

An extreme is an artificially high price above where the currency should be...An extreme is a price where most retail traders would like to buy or sell a certain currency pair heavily..An extreme is a price where most institutional traders would be going out of their positions....

You can define the extreme by the fibo levels of Vegas on the weekly charts or even the monthly...


Thanks,

Nader
  • #13
  • May 17, 2006 12:24am May 17, 2006 12:24am
Quoting Akuma99
I trade the Yen consistently, exactly the same way as I do any pair and to be honest, I don't find any difference. The BOJ may well manipulate the pair, but really, tell me a currency that isn't moved around with subtle comments from people with a vested interest.

For me the Yen obeys the same technicals as does any other pair (well sometimes ).
Agreed...

If it moves and trends, I trade it. I'm not much of a fundamentals guy, although I do think it plays a bigger role in currencies than most other markets.
Mr. Trend
  • #14
  • Sep 8, 2007 4:33am Sep 8, 2007 4:33am
Quoting merlin
the BOJ does have a huge influence over the yen. most technical traders avoid it because it behaves so oddly. i hardly trade the yen on my mechanical systems. but when it comes to the fundies, the yen is my favorite! anytime there is someone influencing a currency its easier to predict the market. there was a guy in market wizards1, i forget his name, but he taught me this. anybody know who im talking about or do i need to go dig this up?.
Hi Merlin,
Did you dig up this Guy's name and website or a Link?
Surely we all would like to learn the technique he taught you.
Or can you please shine some light on the subject.
Thanks Merlin.
John Blake
Winning is a Great Feeling!
  • #15
  • Sep 18, 2007 6:26am Sep 18, 2007 6:26am
Quoting johnblake
Hi Merlin,
Did you dig up this Guy's name and website or a Link?
Surely we all would like to learn the technique he taught you.
Or can you please shine some light on the subject.
Although I didn't know this Guy's name, if I can express an opinion, I think Merlin's sentence("anytime there is someone influencing a currency its easier to predict the market.") is straightforward expression.

About Trading JPY pairs, I'm always trying to imagine Japanese billionaire financier(capitalists) behavior. I often ask myself, Japan has been alarmed at North Korea's nuclear weapons and missile flight tests, does Japanese super-rich people's money want to remain at domestic assets?

By the way, last year Tokyo Regional Taxation Bureau indicated that Ms.Yuko Matsuoka(62-years-old) who translated Harry Potter series into Japanese language failed to report her income(3.5 billion yen).
She relocated her residence to Switzerland for tax reasons(Japan's graduated tax system) and she paid her taxes in Switzerland, but they qualified her as resident of Japan because her career base was virtually in Japan.
Anyway, money is too introverted...
Peace and Happiness through Prosperity (by Konosuke Matsushita)
  • #16
  • Sep 28, 2007 8:49am Sep 28, 2007 8:49am
Quoting smjones
So many people avoid trading the JPY pairs. They say that is because of the manipulation by BOJ. I noticed that others do not shy away from the pairs. Even Vegas himself has stated he does not trade USDJPY. Is there some problem with the pairs? I have traded them before, for a few years, with good success, but now I am wondering if I have just been lucky.

I just wanted to know your thoughts on the pairs...
I made my big money on buy JPY (shorting the pair XXX/JPY), but some of sum I have lose as well..

For me is one of best currency pair for trading...
  • #17
  • Oct 8, 2007 8:53pm Oct 8, 2007 8:53pm
Dear all,
I was always sucked by GBP/JPY,up to now losing around 0.6million$.Eagerly wondering if anybody could provide me some effective scalping or trading strategies for GBP/JPY,free or paid does not matter.
Forex for living now
Regards
Ele
  • #18
  • Oct 8, 2007 9:11pm Oct 8, 2007 9:11pm
hi elle,
execuse me, i m fairly new in trading & still learning. found ff.com to be one of my best source of info & edu (thats of course after my self with trades experices gained here & there. I do have personal attraction towards gbp/jpy, usd/jpy & aud/jpy and trades them often yet minorly.
So mind telling me/us bit bout of losses in them and what you think go wrong, i mean may be some of us here can learned something from d mistakes.
Thanks a lot, keep it up the good posting.

Regards
  • #19
  • Oct 8, 2007 9:29pm Oct 8, 2007 9:29pm
Quoting smjones
So many people avoid trading the JPY pairs. They say that is because of the manipulation by BOJ. I noticed that others do not shy away from the pairs. Even Vegas himself has stated he does not trade USDJPY. Is there some problem with the pairs? I have traded them before, for a few years, with good success, but now I am wondering if I have just been lucky.

I just wanted to know your thoughts on the pairs...

Your answer lies in the following article, i do not know if i am allowed to post the link to this article or not,

------------
How a Drop in Natural Gas May Lead to a Rally in Yen

The Hidden Dangers of High Returns
News this week that a 32 year old Canadian energy trader by the name of Brian Hunter recently lost approximately $5 Billion dollars in a period of only one week in the natural gas market caused an uproar on Wall Street.
Investors in Amaranth Advisors - the Connecticut based multi billion dollar hedge fund for which Mr. Hunter continues to trade, saw the value of their investment decline by 35% after being up as much as 20% this year -- an overall drawdown of 50% all in a remarkably short period of time Some institutional clients such as the San Diego County Employees Retirement Association were badly hurt. SDCERA which oversees more than $7 billion on behalf of retirees and employees of the county, invested $175 million in Amaranth last year, according to hedge fund industry publication Alpha magazine. But with Amaranth down about 35% so far in 2006, SDCERA may have lost more than $50 million on its investment this year alone.
--------------------



So, in this kind of situation it is the carry trade which gets hit first.
  • #20
  • Oct 8, 2007 9:55pm Oct 8, 2007 9:55pm
Quoting ele
Dear all,
I was always sucked by GBP/JPY,up to now losing around 0.6million$.
You lost $600k trading GBP/JPY? If so, I would take a strong step back from your approach.

First, I would avoid GBP/JPY altogether. Its frantic movements attract the gamblers and hot money crowd, but it's usually a new crowd every 6 months, and that alone should speak volumes...

Trade the underlying majors instead. You'll have greater opportunity for gains than trading just G/J alone (i.e. when G/U is up and U/J is down, G/J is flat, thus there are more trade opportunities in the underlying pairs). This concept is lost on many of the G/J-only traders..

The underlying majors will also react more strongly to major technical thresholds. G/J is simply the product of the two, therefore its own technical thresholds hold far less weight than those of the underlying majors.
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