QuantumLogicTrading
Short

USDJPY: BOJ DEPT GOV IWATA - MORE WORDS, NO ACTION; SELL 101/2.5

FX:USDJPY   U.S. Dollar/Japanese Yen
4 months ago
BOJ dept Gov             Iwata was the most recent in what seems to be a slew of attempts by JPY officials, whether it be Govt or BOJ to try and weaken the Yen with yet again more dovish/ promising rhetoric. Statements such as "prepared to loosen policy further without hesitation" where in my mind no doubt undermined by the BOJ's seemingly blind assesment of future expectations - with Iwata claiming inflation should hit 2% by the end of 2017, even though policy is relatively unchanged since January where inflation has gotten worse so i dont know how JPN             is going to pull off what would be the fastest increase in inflation in history. Further, comments such as "BOJ increased ETF purchases to prevent worsening of corporate and public sentiment" were naive at best.. 30bn of etf purchases in a year amounts to that of an average sized hedgefund OR a very small asset manager, so how he thinks such action will uplift the worlds largest economy with increased measures of less than 1% of its GDP more than baffles me. BOJ/ Govt seem deluded to the greatest extent, or more realistically - holding $yen shorts from the start of the year, no poilcy but strong rhetoric certainly supports this view (humorous).

More seriously though, BOJ et als inability to take real responsibility for printed targets, and make policy = words to me makes the future clear for $yen trading. Lower is the only direction that is clear from here - in what was the most pressured BOJ meeting, from both markets and govt perspective, the BOJ performance was dismal so it leads the question, if not now why would it ever change? And Iwatas comments back this up, from the dept govs view, JPN             is on firm track to hit its targets in amazing fashion.. so with such strong/ positive views (even if no data supporting), why will BOJ ease drastically more? they wont, as if most share his sentiment (which they do with most not voting to change the rate or JGB purchases which make up the bulk of the easing programme).

So all in all, Iwata's and previous speakers comments firmly in mind short $yen is now my view - after being a strong $yen bull on the basis of big easing with risk-on spill overs. Fading rallies seems appropriate and the 101.5 level today held unfazed which looks like a good level to add shorts for the imminent 100 level break. On the way down 101.5 was an intermediate level, 102 was the key so I am surprised it held and would prefer to short from the 102 nonetheless (much more likely to hold and 50 more easy pips of downside).


BOJ IWATA SPEECH HIGHLIGHTS
4 months ago
Comment: BOJ DEPUTY GOV IWATA: BOJ DECIDED TO STRENGTHEN ITS MONETARY EASING TO PREVENT RISKS POSED BY OVERSEAS ECONOMIES FROM HURTING SENTIMENT
BOJ IWATA: G7 COUNTRIES SHOWED RESOLVE TO ENSURE AMPLE DOLLAR FUNDING AFTER BRITAIN VOTED TO LEAVE EU
BOJ IWATA: NEED TO CAREFULLY MONITOR IMPACT BREXIT WILL HAVE ON GLOBAL ECONOMY
BOJ IWATA: EXPECT JAPAN ECONOMY TO REMAIN ON GRADUAL RECOVERY PATH
BOJ IWATA: EXPECT CONSUMER SPENDING TO RECOVER DUE TO TIGHT LABOUR MARKET
BOJ IWATA: EXPECT GOVT STIMULUS SPENDING TO CONTRIBUTE A LOT TO GROWTH THIS AND NEXT FISCAL YEAR
BOJ IWATA: YEN GAINS, LACK OF IMPROVEMENT IN INFLATION EXPECTATIONS BEHIND SLOWDOWN IN CONSUMER PRICES
BOJ IWATA: EXPECT CONSUMER PRICES TO START RISING AGAIN DUE TO STRONG LABOUR MARKET, LOW UNEMPLOYMENT
BOJ IWATA: EXPECT CONSUMER PRICES TO START RISING AGAIN DUE TO STRONG LABOUR MARKET, LOW UNEMPLOYMENT
BOJ IWATA: GOVT STIMULUS WILL HELP PUSH UP WAGES AND INCREASE EMPLOYMENT
BOJ IWATA: SLOWING CONSUMER PRICES ARE PREVENTING GAINS IN INFLATION EXPECTATIONS
BOJ IWATA: UNCERTAINTY ABOUT OVERSEAS ECONOMIES COULD CURB WAGE GAINS
BOJ IWATA: BOJ INCREASED ETF PURCHASES TO PREVENT WORSENING OF CORPORATE AND HOUSEHOLD SENTIMENT
BOJ IWATA: PREPARED TO EASE POLICY WITHOUT HESITATION IF NEEDED TO MEET 2 PCT PRICE TARGET
BOJ IWATA: EXPECT BENEFITS OF GOVT STIMULUS AND BOJ'S QQE TO COMPLEMENT EACH OTHER
BOJ IWATA: GOVT FISCAL STIMULUS EXPECTED TO HAVE STRONG IMPACT UNDER BOJ'S QQE WITH NEGATIVE RATES
BOJ IWATA: COMBINATION OF FISCAL SPENDING WITH QQE IS NOT HELICOPTER MONEY OR DIRECT MONETISATION OF DEBT
BOJ IWATA: THERE IS NO ROOM FOR DOUBT THAT BOJ'S QQE IS CONTRIBUTING TO ESCAPE FROM DEFLATION
BOJ IWATA: BOJ REVIEW OF MONETARY POLICY WILL LOOK AT TRANSMISSION MECHANISM AND OBSTACLES TO MONETARY POLICY
BOJ IWATA: BOJ'S REVIEW OF MONETARY POLICY NOT MEANT TO INDICATE A SPECIFIC POLICY DIRECTION
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