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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 1558
Posted: Feb 22, 2010 5:00
Comments: 1558
Forum Topic:
JPY
Discuss JPY
yes japan has record debt but it ows it to itself and not to foreigners.
Ashraf
JPY is relatively strong because Japan is in deflation thus there is no reason to assume the value of JPY assets could be eroded by inflation ... a downgrade doesn't turn deflation into inflation
Ashraf
Yen is in the upside but my colleague at saxo told me on monday that tere is a rumour on the markets that S&P could downgrades JApan... Ashraf did you hear that please ?
Ashraf
Last year, the Financial Services Agency announced it would set limits on how much foreign-exchange investors can buy on margin, in order to protect "Mrs. Watanabe" - no relation to the Your Party leader. The common surname has become the collective moniker for Japan's retail investors, in a country where housewives are often in charge of family budget and investment decisions.
The plan calls for the leverage cap to be set at 50 times the amount of principle cash committed starting in August, and then further cut to 25 times next year.
The rule change came after a spate of local media reports about some of these housewives losing huge sums, trading on margin hundreds of times the minimum amount they were required to invest up front to open their accounts.
Tohru Sasaki, chief foreign-exchange strategist for Japan at J.P. Morgan Securities in Tokyo, estimated in a report this week that "Mr. and Mrs.Watanabe" hold about 6 trillion yen ($67 billion) of short-yen positions, which he said is "almost the same level as the peak in 2007."
While Sasaki doesn't expect a flood of unwinding, he does expect some yen-buying stemming from the new regulations, as the Watanabes unwind their positions to comply with the new rules."
http://www.marketwatch.com/story/short-term-yen-support-is-real-2010-07-14?link=kiosk
Ashraf
I just wanted to know your outlook for USD/YEN pair since Standard and Poor is considering cut Japan's credit rating and also of the political issues there right now. I am long at 88.30 and my target is 90.30
thanks,
Farzan