In short, I hope speculative JPY longs are aware of these risks, and take positions off when you see moves like we saw this week.
i don't think there are any JPY longs--that's the beauty of it. a rise in JPY is the one thing absolutely no one in the world wants. lo and behold, it's the one thing that is happening.
They are the experts in currency intervention. No one does it better.
JPY used to be 360 to the dollar. now it is 94 to the dollar. they have been fighting all the way down, mainly by acquiring our high-denier green toilet paper. they make George Bush look competent.
however, i agree w/you they will try once again to save USD. but then again, EVERYBODY knows this and expects it. personally i have reduced my JPY position, selling into Friday's rally. still, it has been the best port in the storm out there so i'm not abandoning it entirely.
BOJ has been preventing a breach of current levels for decades
these lines in the sand keep getting lower and lower. 300, 250, 200, 150, 130, 120, 115, 110, 108... all these Rubicons have been crossed. now what, we are down at 94? i guess if they keep moving the goalposts they will always succeed.
but i think they are just playing games--they can't defeat history, any more than US ratings agencies can permanently hold subprime RE debt at AAA levels.
eventually i think JPY takes out the 1995 level, which was 80-85 to the dollar. at that point, Citibank predicted JPY would go to "54" or something very precise. yes, and the meaning of life is "42". very precisely wrong: JPY went the other way, to 149 or so, and has been clawing its way back down for 12 years.
yes, there will be countertrend rallies, but i think JPY has a long-term date with the 70s. that should be great for the Nikkei -g-.
a very good book on the history of MOF currency manipulation is The Weight of the Yen. |
