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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
Fundamentally, Wed & Thurs, FOMC minutes release, BoJ rate decision (looking to maintain 1% infl. rate), ECB publishing monthly report and China GDP figures...looking for some 'good' news in there somewhere ;)
TIME FOR ANOTHER JAPANESE POLITICAL SHAKE-UP?
Yen awaits Tuesdays Japanese Lower House vote on a consumption tax bill (double the 5% rate), which will likely pass by a majority, as the ruling DPJ (289/480 seats) is said to have agreed with the opposition LDP (120 seats) as well as the smaller opposition New Komeito Party.
But there is talk that even if the bill passes, the anti-bill faction led by Ozawa inside the ruling DPJ may break away from the party and force PM Noda to resign.
The fundamental impact of raising consumption tax may be positive for the yen as it addresses the nations ballooning budget deficit, which is among the recommendations of the major credit rating agencies. Currently, the yen is outperforming as a result of the renewed deterioration in global equities.
Nonetheless, we have seen in the past how eroding political confidence in Japan can weigh on the yen. In the event that a no-confidence vote emerges and/or a dissolution of the Lower House dissolution breaks out, then we could see fresh downside for the yen.
The other scenario would be for the tax hike bill to be passed and lead to yen selling as the fiscally austere move may necessitate fresh easing (asset purchases) by the Bank of Japan.
We expect USDJPY to remain supported above 79.00, before regaining a push higher on a combination of renewed political reverberations in Japan and a fresh run-up in US (and global) bond yields as traders doubt the efficacy of the planned Operation Twist in the face of increasing fiscal questions in the US and talk of a bubble in German bunds.
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Ashraf
Both of yesterdays longs proved on target, except for 1 of the 2 trades was 7 pips away from the final target. We are adding one more new Long to the remaining trade, but with a more aggressive upside target. 100 DMA edges higher to 80.40. Weekly trendline support climbs to 79.00.
(NEW) Long USDJPY between 80.05-80.35, for limit between 81.45-81.75, stop at 79.30.
Wednesdays Long USDJPY between 79.30-79.65, for limit between 80.20-80.40, stop at 78.90, went as high as 80.33 (7 pips way), therefore remains in progress.
Wednesdays Long USDJPY between 79.10-79.30, for limit between 80.00-80.20, stop at 78.70 hit all targets.
AL
Have a good weekend
symmetry on possible abc up at 80.77 just above the 100dma
glgt
glgt
looks like inverse RS formed however consolidating, going into above news release and tomorrows fomc...
"Noda is (apparently) watching....", watching what is the question...
BoJ monthly Eco report, BoJ minutes & Shirakawa speech should keep stirring things up next week...
...G20 summit coming up too btw
glgt