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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Moominoid who wrote (53692)	8/2/2006 4:18:05 AM
From: YanivBA	Read Replies (2) of 116555

BoJ News and short IMO Yen Climbs as Bank of Japan's Mizuno Signals Interest Rates May Increase Aug. 2 (Bloomberg) -- The yen rose for a second day after Bank of Japan policy board member Atsushi Mizuno signaled the central bank may raise interest rates again this year after lifting them for the first time in almost six years last month. Japan's currency may extend a 1.5 percent gain against the dollar since the central bank raised rates July 14 as Mizuno today doused speculation the bank won't boost borrowing costs further this year. Board member Miyako Suda on July 26 said more interest-rate increases in 2006 shouldn't be ruled out. ``Put Suda together with Mizuno and it does seem there's an effort to indicate there could well be another hike this year,' said Adrian Foster, a director of currency sales at Dresdner Kleinwort in Singapore. ``It certainly supports the upside direction of the yen.' The yen rose to 114.38 against the dollar at 8:25 a.m. in London from 114.57 late in New York yesterday. It also climbed to 146.58 versus the euro from 146.96. Dresdner forecasts the yen reaching 107 against the dollar this year, Foster said. ``I'm concerned the Bank of Japan's message of adjusting interest-rate levels gradually would be interpreted in the wrong way and lead to the conclusion that there would be no additional rate increases this year,' Mizuno said today at a meeting with business executives in Fukuoka, southwestern Japan. bloomberg.com A rise of the Yen is a prelude for another episode of "the unwinding of the carry trade". stockcharts.com IMO Yen denominated S&P has come to lead Dollar Denominated S&P. It is currently almost back at its short term trend line way before the Dollar denominated S&P (not including Aug 2). Plus there is a bearish divergence on the MACD histogram. Hope the bears can pull themselves together. Reality should be good for everyone. YanivBA.

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