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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: Killswitch who wrote (12996)	10/31/2002 4:02:19 PM
From: Killswitch	Respond to of 30712

Looks like there could a short squeeze in Yen sometime soon: "The Japanese Yen 10/31/02 03:41 PM EST Because most of the action in foreign exchange markets is likely to be yen-focused, we thought it might be prudent to speak a little further about reform policies and their likely impact. For the most part, we are positive about the announcements. Our primary reason for saying so is that there appears to be at least some cooperation between the LDP, the Bank of Japan, and Mr. Takenaka of the FSA. Regardless of the effectiveness of the plan, fiscal policy cooperation is positive. Another positive note: Last night Fitch assured investors that policy announcements out of Japan would not alter their current rating of Japan. As for monetary policy, Japan indeed eased monetary conditions along two fronts. First, they have increased the daily current account surplus from yen 10-15 trillion to yen 15-20 trillion. Also, they plan to increase monthly JGB purchases from yen 1.0 trillion to yen 1.2 trillion. On the negative side, there are many who feel the watered-down version of reform simply will not be effective. As we mentioned yesterday, should that be the case, the market will punish Japanese assets. Finally, the yen has been strengthening as of late against most major currencies. The focus seems to be its exchange rate against the U.S. dollar. Several banks tell us that critical support lies around 122.15. Should the dollar break below there, a test of 121.50 will be close at hand. Generally, the market is still quite short yen (long dollars), so any move past these support levels could cause a little acceleration. Long yen"