Tim, please educate me on Yen - if it goes up, does it mean that the japaneese stocks will go down as they handle most in USD?
TASAVANT
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Will keep an eye on it waiting to see it firm up a little, if this scenario works out the main equity indices will be a sell due to carry trade...
HermanBrummer
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Man love your charts, but this one seems iffy, I live in Japan and have been following this for 3 years. BOJ has a mandate from ABE regarding the Yen, and that is why it has not been able to break that resistance line.
If it was just the market, then the chart would have gone north a long time ago, but with Abe's three arrows, you'd basically be betting against the central bank of Japan.
I have not read the recent BOJ reports on their website, but that was the basic idea when I last had a look, (about 4 months ago).
Any thoughts ....? Looking forward to your opinion.
HermanBrummer
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Look at this, not one candle has even managed to close above the 96 level, I'd be shorting this... with a risk range from the current 96 range to the highs 97.
A-shot
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Indeed, it looks like a good resistance. But...it looks like the price gets squeezed from the bottom and as it came from top, it is a sign a bullish change of trend. The 'winds' from the bottom may be blowing 'harder and harder' and hopefully will blow through the roof.
HermanBrummer
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But the roof is being kept in place by the BOJ, and the BOJ today just said that they will be continuing their QE. So....
A-shot
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Then....what is the projected forecast? going below 80 is a helluva discount to the previous levels.
HermanBrummer
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I don't know how this will pan out... but think it has to leave the key levels to really know...
We can clearly see from the USDJPY chart that market forces are forcing the chart down, this just reflects the Japanese well known problem with the Yen strength. They have at various times intervened, but every time its been short lived. While the bank currently has the mandate... to keep the yen weak, e..g above 100 because it affects the Japanese companies so badly. For Toyota, who I speak to on a weekly basis, just one yen here of there affects their bottom line significantly, I think close to a billion Yen, if I remember correctly.
I think it would be best to see how the Abe experiment plays out and wait the price to cross beyond either of the yellow lines.
The question is how long can the BOJ keep this propped up? I think they can do that for quite a while this time... because Government just uses the money printed on construction projects and infrastructure, including prep for the Tokyo Olympics.
A-shot
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Well they been driving it lower...but now they would have to keep it there only, going lower seems to far. But on the other hand, an artificial, manipulated trust and yen in a small country with a huge economy may still be possible