JPY Cross Pairs

This thread is intended for traders who trade USD/JPY as well as ALL of the other JPY cross pairs including AUD/JPY, CAD/JPY, CHF/JPY, EUR/JPY, GBP/JPY, and NZD/JPY.

Due to recent monetary policies implemented by the Bank of Japan for more easing I believe 2013 could be a fun year for USD/JPY as well as the Yen crosses. We have already seen AUD/JPY and NZD/JPY break out of multi-year ranges to the upside so exciting trending times are back.

I welcome any and all traders to post their analysis, charts, as well as Japan news related articles in this thread for open discussion.

Please try to keep this thread clean as attacking other members is not welcome here.

Trading the Yen Crosses

The JPY is one of the more popular cross currencies and it is basically traded against all of the other major currencies.

EUR/JPY has the highest volume of the JPY crosses as of February 2010.

GBP/JPY, AUD/JPY, and NZD/JPY are attractive carry trade currencies because they offer the highest interest rate differentials against the JPY.

When trading JPY cross pairs, you should always keep an eye out on the USD/JPY. When key levels are broken or resisted on this pair, it tends to spill over into the JPY cross pairs.

The following thread also has quite a few interesting articles relating to the JPY: http://www.forexfactory.com/showthre...13#post6131313


Japanese News Sources

http://www.bloomberg.com/news/japan/

http://www.reuters.com/places/japan

http://e.nikkei.com/e/fr/freetop.aspx

http://www.ft.com/intl/world/asia-pacific/japan

http://www.japaninc.com/japan_news_economy



Financial Research Companies - FREE Investment Newsletters

http://www.dailywealth.com/

http://www.moneyandmarkets.com/

http://sovereignsociety.com/

Nice, reporting in! Currently long AUDJPY

I am also shorting the CADJPY based on weekly chart. Currently + 45, SL = BE

Hey FxLapozi,

Thanks for responding. I am on the other side of the trade as of right now. Got short @ 94.84 today.

This is a counter trend trade so could be risky but price has seemed to been stalling when looking at the Daily charts and I still see more downside movement in the near future.

Short AUD/JPY @ 94.846

SL: Just above 1st weekly resistance @ 96.20
TP: 89.50 (I reserve the right to tp @ anytime depending on PA)

Weekly Support / Resistance:

1st Resistance: 95.97

1st Support: 92.60
2nd Support: 89.50
3rd Support: 88.48


My main area of interest will be 89.50 as I think price can move to this area in the short term. However, I remain bullish on AUD/JPY for the long term.

Hi 100pips,

I have been long-ing ever since it breaks the WEEKLY CHANNEL. A retracement is definitely on the card right now but my long term goal is around 103.xx.

Currently my SL moved to +100... 91.xx

Very nice!

The following article was written back in June 2012...

Why the yen could be today's best currency trade
by Jack Crooks

Saturday, June 9, 2012 at 7:30am


The Japanese yen continues to defy its own economic fundamentals. It continues to move up and down in value, in correlation with "risk off" (stocks and growth assets moving lower) or "risk on" (stocks and growth assets moving higher). But the latest statistics and dynamics driving the Japanese economy into the future still tell me the yen will weaken in a very big way, sooner or later.

If you are a long-term player who has some patience, I consider this the best single trade setup among the major foreign exchange pairs: A core long-term long position in USD (U.S. dollar)/JPY (Japanese yen). In other words, bet that the yen will fall in relation to the dollar.

http://images.moneyandmarkets.com/2443/chart1.gif

Of late, the yen (relative value) is moving in tight, negative correlation with risk assets. Using the Dow Jones Industrial Average (DJIA) as a measure of risk assets, you can see that as the Dow falls, the value of the yen rises. On the chart below, the USD/JPY falls as the yen gets stronger relative to the U.S. dollar.

Whether you consider the yen correlation against the DJIA or the Nikkei 225 Index, it is effectively the same — concern in global stock markets means the yen strengthens. The primary reason is simple repatriation.

Japan is still a very wealthy country despite the economic calamity experienced since the bubble broke back in 1989. Its insurance and pension funds have vast amounts of investment capital. When things get ugly globally, measured by stock markets, these big pools of funds tend to rush back home to hide in local Japanese government bonds for safety.

For example, consider the relationship between the DJIA and USD/JPY going back to the credit crunch period beginning in mid-2007:

DJIA down 15.2 percent from its peak

USD/JPY down 35.9 percent from its peak

http://images.moneyandmarkets.com/2443/chart2.gif

Dollar/yen has fallen 35.9 percent, or put another way — the yen has strengthened 35.9 percent against the U.S. dollar since the credit crunch (creating huge price pressure on Japanese exporters) while stocks rose.

And when you consider that one of the major impacts of the credit crunch was the decline in global demand for goods from export-oriented countries, such as Japan and China, you can see why Japanese companies are screaming for relief from this double whammy of pain.

Japan's Soaring Government Debt Crisis

The dangers of a declining trade surplus and strong yen pressures are put quite clearly into context when you understand that Japan will likely run a fiscal deficit of a whopping 10 percent of GDP. Meanwhile its debt/GDP ratio could rise to the moon-launch level of 241 percent (roughly twice the level of Italy) this year, according to forecasts by the International Monetary Fund.

Notice in the chart below how government debt has continued to ramp up after the bubble broke in 1989. And this fits the view gaining ground that after Mr. Market is done crushing the European bond market, it turns its guns on Japan.

http://images.moneyandmarkets.com/2443/chart3.gif

Now, what makes that picture even worse is the train-wreck scenario of Japan no longer being able to fund these huge debt needs internally as the pools of private and business savings are drying up. In other words, if Japanese interest rates rise from their incredibly low levels — 0.89 percent on the 10-year Japanese Government Bond (see chart below) — the cost of funding with 200+ percent debt/GDP could shoot up exponentially.

If Japan's bonds begin to reflect real or even potential funding risk, forcing interest rates higher, it means that local demand from Japanese institutions will fall even more, putting greater pressure on rates, while the slowdown in economic activity will further reduce Japan's available pool of savings to fund this growing need.

http://images.moneyandmarkets.com/2443/chart4.gif

Japan is facing a very scary situation here. Sooner or later, the yen will begin to reflect these internal realities. I think it will be sooner. When it does, the value of the yen has a very long way to fall (USD/JPY has a very long way to rise). The long-term profit potential I see here is enormous.

Best wishes,
Jack

This one Jack Crooks wrote back in August. Those who followed his recommendations made a lot of money during the past few months...

Sovereign debt meets Japanese yen, and releases a triple-whammy of pain!


You may recall my Money and Markets column, “Why the yen could be today’s best currency trade.” Today I want to give you an update on why I believe we are very close to a long-term peak in the value of the Japanese yen. Or to put it another way a major long-term multi-year bottom in the U.S. dollar.

Let’s first go back to the 1980s when Japan was poised for what many believed was inevitable economic domination. The country was in the midst of a huge credit bubble — valuations were off the charts.

For example, in 1989 the Tokyo Imperial Palace was said to be worth more than all the real estate in California! The country’s trade balance was soaring against the world, especially the United States. Japanese companies were gobbling up real assets throughout the globe.

Here in the U.S. the premiere properties acquired were Pebble Beach Golf Course and Rockefeller Center. Americans were concerned, very concerned about this “foreign invasion.” And Japan bashing was in vogue.

During the early 1980s the U.S. dollar was in a major bull market. Despite the real value of the dollar and other fiat currency values inflating away, the dollar staged a rally of almost 50 percent from its low in 1980. Paul Volcker’s tough love administered by a massive hike in interest rates, was the catalyst of this multi-year rally.

With Japan the big dog on the block and its trade surplus soaring, U.S. manufacturers and other trade groups began applying pressure for a dollar devaluation — the dollar was “too high.” So the major global powers jumped into action to rectify this terrible wrong.

The United States, the United Kingdom, France, West Germany, and Japan got together at the Plaza Hotel in New York and agreed that the dollar was too high. The Plaza Accord or Plaza Agreement was signed on September 22, 1985. In short, the countries agreed to allow their respective central banks to intervene in the foreign currency market through a coordinated effort to push the U.S. dollar down.

Though at the time billed as a dollar problem, the implicit rationale for the Plaza Accord seemed a defense against Japan’s rising trade surplus. Thus it was more of a “push up the value of the yen” agreement.

Many, rightfully, believed Japan’s aggressive export-dominated trade policy took advantage of relatively open markets in the West by producing increasingly high-value goods and morphing up the consumer value chain. But at the same time it continuously found a way to stop or delay Western goods from making it to Japanese consumers.

As I said, the Plaza Accord worked in pushing up the value of the yen. But it did little to solve the trade balance problem. Japan’s trade surplus remained strong even as the yen soared.

In the chart below I have compared Japan’s trade surplus on a monthly basis with the yen’s value from 1983 through June 2012. I noted the Plaza Accord and the official Credit Crunch start by the red vertical lines. Think of them as bookends on the massive rally in the yen.

http://images.moneyandmarkets.com/2503/chart1.gif

Here is where it starts to get interesting if, like me, you believe the USD/JPY is close to a major long-term bottom …

The way I see it, the real trigger that changed the dynamics for Japan’s seemingly unending trade surplus was the Credit Crunch. That’s because the Credit Crunch brought an end to Japan’s long string of trade surpluses!

I also believe it triggered the beginning of the end of the Asian export model as we know it. I see three major reasons, which are interrelated and self-reinforcing:

First, it marked the end of an era of unlimited global liquidity …

Second, it triggered a secular change in global consumption …

And third, more specifically …

Approximately 90 percent of Japanese debt is held by Japanese investors.

Over the years, huge pools of savings and massive current account surpluses have provided plenty of money to fund the Japanese government’s growing need for funds — as tax revenues were increasingly scarce given Japan’s low growth deflationary economy.

But now, Japan faces a daunting prospect thanks to the Credit Crunch. No longer is it generating the current account surplus it needs. Consumer demographics and low growth have pushed the consumer savings pool sharply lower — heading toward zero.

And companies domestically have been using their savings pools to recover from the Tsunami and plug the holes from falling demand for their exports. Therefore, the Japanese government is at risk of a funding shortage — at least internally. And this is very dangerous.

Here’s why …

Japan has a government debt-to-GDP ratio of around 215 percent. The interest cost to fund this debt is huge. Plus the yearly funding needed to maintain government services is massive. Add them up and you get a mismatch between government revenues and spending. It’s called a budget deficit, and here in the U.S. we know firsthand how that works.

Next, take a look at the chart below. Presently the yield on the benchmark 20-year Japanese government bond (JGB) is 1.7 percent. In fact it has hovered around this level since 1998.

20-year Japanese Government Bond Yield
vs. the USD-Japanese yen 1990-today

http://images.moneyandmarkets.com/2503/chart2.gif

If Japan does not have the internal funding available to handle its needs, it will have to look to international investors for this funding.

So Japan is faced with a triple-whammy of pain:

1) Rising funding needs,
2) Falling internal sources of funding,
3) Rising funding costs because foreign investors will expect a much higher yield than 1.7 percent to account for the risk of holding Japanese debt.

Because Japan is facing this triple-whammy with an already astronomical debt load, this mix of problems will likely lead to a vicious self-feeding spiral. Then higher interest rates will lead to higher funding costs and falling bond prices will lead to dumping of bonds, which leads to higher yields to entice new buyers.

I believe we are seeing the outlines of what might eventually become a Japanese government bond default as the sovereign debt problem visits Tokyo. My suspicion is that once the markets are finished attaching the euro-zone bonds, they will train their guns on Japan.

To sum it up, a change in the global economy and the outlines of a sovereign bond crisis in Japan suggest to me that we must be very close to a major trend change for the Japanese yen.

Best wishes,
Jack

This one was written in October. I knew these are a little old but I thought they may still interest those who trade JPY cross pairs.

The Land of the Rising Sun is Shining Brighter
By Sean Hyman, Editor of Currency Cross Trader


Sometimes in life it can seem like when something has been a certain way for a very long time that it will always be that way. It’s like the brain has a tendency to get conditioned to a situation and decides it will always be that way.

Well, investors get the same way about a stock or index that’s been out of favor for a long time. They can never seem to imagine a day when it will come back.

Take, for instance, Japan’s Nikkei index. It’s been down for over two years in a row, even as most other stock indices have rebounded.

But actually, you can look further back to the larger trend and see that Japan’s Nikkei was one of the first indexes to top out. The Nikkei topped out in early 2006, while most other stock indexes topped out at the end of 2007 or early 2008.

So, the Nikkei has really been trading lower for about six-and-a-half years. Well, you can see where it would be easy to get sucked into the thinking that those stocks are never coming back. However, it’s simply not true.

There are a couple of things changing that are going to set up the Nikkei for its first real rally in years.

A Change in Direction for the Yen

The first thing is the change in the yen. You see, the Japanese yen has been strengthening in a big way ever since July of 2007, and it finally peaked in October of 2011 but traded somewhat sideways through January of this year.

From that point, the yen has begun to descend. In fact, let’s take a look at the Nikkei in the weekly, three-year chart below with the Japanese yen plotted below it.

2012: The First Down Year for the Yen in Years
http://sovereignsociety.com/files/2012/10/Yen1.jpg

Why is the fall of the yen important? Japan’s Nikkei is filled with major exporters such as Toyota, Honda, Mazda and Sony.

From the viewpoint of an exporter, you want a cheap currency. If your goods appear to be cheaper because a foreigner’s money goes further, then they are more apt to buy more of your products.

However, if your currency is stronger, your products will appear more expensive to foreigners and you’ll sell fewer. So what the currency is doing is a big deal. It’s one of the determinants of how well these companies will do.

In other words, when dealing with a strong yen, they have the wind in their faces, and when they have a falling yen, these companies finally get the wind to their backs.

If you’ve ever ridden a bicycle in the wind, then you know it makes a big difference whether the wind is with you or against you.

It’s the same with these companies. With absolutely no other changes, their performance and results will vary widely depending upon the value of the yen.

What Stimulus Means for the Yen

The other thing that has changed in the favor of the Nikkei is that Japan has instituted an “asset purchase program.” A pretty sizable one at that … to the tune of 80 trillion yen. Then, on Friday, Japan announced 750 billion yen ($9.4 billion) of stimulus to boost growth. The measure was undertaken after bond dealers' concerns over government spending raised fears of a disruption at a December debt sale.

This will be good for Japan’s stocks for now and bad for its currency.

So between the stimulus programs and the change in the direction of the yen, Japanese stocks have a chance to reverse course for the first time in over six years.

With that in mind, let’s look at an ETF that tracks Japanese stocks. It’s called the Wisdom Tree Japan Total Dividend ETF (DXJ). Let’s check out its daily, two-year chart below.

Declines in the Yen Can Be the Catalyst for Huge Moves in Japanese ETFs

http://sovereignsociety.com/files/20...tle-Wisdom.jpg

Going into 2012, the yen took a tumble and Japanese stocks got their first good shot in the arm they’ve had in a long time.

Now, the yen is beginning to fall off the map again and DXJ is breaking out of its triangular coiling consolidation.

I believe this sets up DXJ to where it could head to $36 per share or higher over the next two to three months. This means the stock could move a whopping 11% within that very short time if the yen keeps falling as I believe it will.

So check out DXJ. I believe it’s primed for its next launch higher and it’s going to catch the masses off guard. They’re going to wonder where this rally came from. But you’ll know that it’s come from the new stimulus and from the change in the direction of the yen.

Have a nice day!

Sean Hyman
Editor, Currency Cross Trader

Real-Time Technical Analysis for JPY Cross Pairs:

Last two charts are real-time technical analysis for USD/JPY on the Daily and Hourly time frames


If you would like to see how this analysis works you may do so here: www.Investing.com

long eur/jpy 121.70 sl 121.55 tp 122.48

great work here!!!

I´m going to read at home these articles!!
thanks bro

Closed one LONG scalp at 94.25 just now. + 25. Monitoring what NY session gonna do now

Thanx for reports but at these reports at investing.com there is a silly thing. It change in seconds. Like in picture. It says sell from 90.30 for ex. After 10 sec. you see that it says buy. Dont rely on there technical analysis. Rely on specch...

Reason for the scalp was because of this red little line.

Of course, I think it's gonna rise higher but I dont have the time to monitor the trade with a lot of works in hand. Closed for green.

Pending Sell Limit at Arrow area with Tight SL. Another S/D Area.

AUDJPY PA is slow. Still lingering around 55 area while EJ already moved up 30++pips

Pending sell limit for EJ as well.

100 pips a day awesome thread good sir. I will definitely be contributing a lot here.

This e/j trade from is from last week that I discussed on in e/j thread. I'm looking for 125.00 as a target my average price is 119.25, I booked profit on 3 lots last night & I'm looking to add in more around 119 & 120. I'm expecting a bit of a pullback this week do to some profit taking & repositioning in front of NFP, so I am hedging it with a short on the g/j which I put on last night got filled at 143.20 which is the chart below.

http://i1356.photobucket.com/albums/...ps2c3a0048.jpg

http://i1356.photobucket.com/albums/...pse1c496eb.jpg

This is my live account

http://i1356.photobucket.com/albums/...pse043d134.jpg

tp hit

missed going short between 122.49/62 i had to sleep lol