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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
short USDJPY 81.87
glass display not lcd, it is a super strong glass outside lcd.
apple lcd from lg or sumsung, cpu from sumsung since ipod, flash memory from sumsung and toshiba, battery from japan (maybe sony, not sure).
So G7 is about USD JPY is a side effect. This doesn't take into account a still possible nuclear disaster. The real winner here is the FED. Aside from this a bunch of professional optimists
begin only slowly to recognize that many products won't function with some hitech parts made in Japan. For example Apple needs LCD panels and CPU from Japan no one else has the know how and skill. BMW cars have a lot of electronic components made in Japan. And so on. And on.
My conclusion 100% chart free it follows with mathematical precision JPY rise is eventually unstopable .
----- Before I get into todays yen action, it is important to keep readers alert of a potential Chinese tightening action (RRR rather than rate hike. Recall that China benefits from a rising yen due to its prolonged purchases of Japanese Govt Bonds. Recall that the PBOC made its first interest rate hike since 2007 (not RRR) on Oct 19, less than one month after Japan made its first intervention since 2004 on Sep 2010. Any rate hike would upset risk appetite and dampen the G7 efforts to weaken yen. After all, China is not a member of the G7. Just stay alert this morning ---------
WILL INTERVENTION WORK?
Japans principal aim is to bring the yen to pre-earthquake levels. The durability of the latest yen weakness will mainly work to the extent of continued coordinated yen selling by the G7 central banks. --------- From an interest rate element, coordination stands robust chances of success considering rate hike expectations priced in for the Bank of England and the European Central Bank. The same applies for the Bank of Canada, whose currency is propped by supply and demand dynamics in the oil sector. This leaves us with the Federal Reserve, which may be the weakest (and most important) link considering expectations for further QE beyond June. DESPITE THE prospects for intervention success from an monetary policy stance, concerted action may fail (and yen rises anew) if financial markets react negatively to the aforementioned tightening aspirations of the BoE, ECB and BoC. MORE FREQUENT INSIGHTS ON TWITTERhttp://twitter.com/alaidi
Ashraf