Heyward,
Thank you.
The statement made by the Japanese PM may have been
prophetic. Time will tell. But, I trade bond
futures, I never take actual delivery of any bonds.
I believe the Japanese may sell their US bonds, but
not yet. The day the Japanese start to unload
their US bond holdings, I expect to be short the
bonds. Remember, lower bonds prices in the US will
attract foreign investors and strengthen the dollar
against their yen. This could be the worst thing
Japan could do if and when their economy picks up,
as you suggest it might. When an economy is
heating up, you need your currency to be strong in
the global market or you risk inflation.
Smart money will always be in the market before
everyone else finds out. But, the charts always
show you what the smart money is doing before it
becomes news.
I don't think Japan will sell their bonds too
quickly. I'm sure they also see bond prices moving
higher. They also want the best price for their US
bonds. They're not ignorant of market technicals.
If I were holding their bonds for them, I would
surely not sell them now. They're looking at the
same chart we are. I think the PM's statement
might really have been loose talk. He has no
market saavy. Probably, when his market analysts
told him to be quiet, he backpeddled a bit.
Surely, they will not announce the sale, they will
just do it. (damn, doesn't that remind you of
something?) They will sell a little at a time.
And as long as the market is moving higher, it
would be advisable for them to wait for a better
price.
A final thought. That the PM did make that
statement at all gives me probable cause to believe
that such conversations behind closed doors in the
Japanese Cabinet did, in fact, take place. That
statement doesn't just come from thin air. It was
probably on his lips from his last closed meeting
earlier that morning just hours before his public
statement. |
