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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (2312)	12/14/1999 8:10:00 PM
From: Step1	Respond to of 3536

>>> significant yen depreciation. If they choose that route it will be interesting to see how much money moves out of yen.<< Mine for a starter ... sg

To: Henry Volquardsen who wrote (2312)	12/15/1999 9:31:00 AM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 3536

...non yen deposits have done poorly. Viewing the performance of non-yen assets from the Japanese point of view, and seeing that they have done poorly, is merely observing the fact that the Yen has strengthened. Similarly, viewing the performance (e.g.) the Nikkei from a U.S. perspective and seeing that it has done quite well from a USD point of view significantly affected by the fact that the Yen has strengthened. But to argue that, since Japanese equities have done well for Americans, Americans ought to and will continue to buy Japanese equities, seems like a foolish argument to me. Just as to suggest that Japanese who bought dollars a year ago, and have done badly as a result, ought to sell dollars now. (I am referring to scenarios other than short-term trades). If anything, (short) selling yen assets looks more attractive now than ever, without considering the fundamentals. After all, isn't "selling high" part of the recipe for success? Considering the fundamentals only seems to reinforce the case. It actually seems so one sided to me that it worries me as to whether I am seeing things clearly. Either I am extraordinarily right on this (sell Japan, sell it now, sell it hard), or am missing something really big (oops!). One of the few ways I can think of for the Japanese to get out of this involve currency debasement and significant yen depreciation. I see currency debasement as inevitable, and the only possibility. My lack of vision here worries me too (I must be missing something!) If they choose that route it will be interesting to see how much money moves out of yen. Do you mean while the debasement is in progress, or after the fact? Isn't it a bit too late to get out of the yen after this happens? (Not to say that this wouldn't happen, since it is equivalent to "buy XX because it as gone up", and that does seem to be a popular method of analysis). - Daniel