📌 @ridethepig G10 FX Market Commentary - JPY for the Yearly Close
Of course, the breakout here can be bought after so much consolidation but it takes time. Buyers have no worries, since with a solid centre a loose Japanese fiscal and monetary policy is easy enough to map. Even more than that Kuroda and Suga are well seasoned, the logical link here is for USDJPY lower as a safe-haven flow but my models are picking up on it dislocated from the rest of the board on a capital flow basis. We managed to clear the 2020 targets very early and it will be a pleasure to review:
...we have to be interested in how the crowd can be wrong and how they are being led into the wilderness. Japan understood clearly the issue from the centre, unlike the West which have attempted to use monetary policy to cure private debt problems with issuing more private debt. They have breathed this mantra since 1991, in this sense and others they are miles ahead of the West and had a few decades to get to work on it with fiscal policy.
We will go into the macro details in the coming days after the round of G10, EM, Commodities, Equities and Yields maps are updated. Then we can open the discussions for all to join in with the macro charts before we go into the short-term possibilities and build the shop for 2021 and beyond.
Thanks as usual for keeping the feedback coming 👍 or 👎
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Trade closed: target reached
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USDJPY arriving at the final 149 target ... well done all those that riding this from 102/103, a flawless carry trade!
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Much cleaner macro profit taking and I think we all have the answers as the carry trade begins to unwind. For those riding shorts on the way back down, 135 is a good level to start clearing first targets.
In a recent conversation I had with a colleague, we discussed the resurgence of the Japanese currency. The strength of Japan, in the long-term rally, relies on its expansion of credit. This colludes with he fact of the already low rates for the country. Following from recent weeks, the sell off of corporate bonds for Japan is a striking message of growth towards attractiveness as long term investors see a potential for higher yields.