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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (26758)	2/19/2005 9:02:26 AM
From: russwinter	Respond to of 110194

I more cautious on copper right now though, as the specs have quickly built up positions, so there is something to the squeeze theory. I think a "hold your nose" long Yen trade is setting up. The commercials expanded their longs positions from 3291 to 17,271 last week. There really isn't any reason for Japan to suppress the Yen right now as they are running huge trade surpluses almost too much so. This may explain in part the lack of FCB participation in recent UST auctions. It appears Japan's USD reserves are just building up, and I wonder if even the Japanese didn't use the recent anti-USD fund liquidation to shift into other currencies or real assets? February 15 – Bloomberg (Tim Kelly): “Japan’s current account surplus expanded 28 percent in December as imports fell faster than exports. The surplus grew to 1.78 trillion yen ($16.9 billion) from 1.39 trillion yen in November… From a year earlier, the surplus widened 35 percent to 1.61 trillion yen.” February 17 – Bloomberg (John Brinsley): “The yen may rise as much as 10 percent to 95 a dollar this year and the government shouldn't try to halt the advance, Japan's former currency policy chief Eisuke Sakakibara said. A 2.4 percent slide in Japan’s currency this year ‘is over,’ and it will gain past 100 to the dollar in the next few months as investors realize the U.S. Federal Reserve will stop raising interest rates, Sakakibara said… ‘Breaking 100 is just a natural market move, which authorities should let happen,' Sakakibara said. A level of ‘95 yen for the Japanese economy at this moment is not disastrous. If it goes beyond 90, and goes to 80 or 70, I would recommend intervening,’ or selling the currency.”