JPY Drops To 27-Month Low As Abe Front-Running Continues

Tyler Durden's picture


Slowly but surely, USDJPY has moved back above 85.50 to its highest (weakest JPY) in 27 months as the threat promise of central bank intervention has once again created more front-running. With the market attempting to price in Abe's extravagance, we wonder just how much bang for the buck his 'actions' will create when words are not enough. Will Abe 2.0 be the same as OMT, QE3, and QE4 with the event actually constituting the 'top' or peak impact? Critically though, once Japan actually formalizes what it will do, which will be limited by how much rates can rise on bonds before all government revenue is used to fund cash interest, JPY will spike again, facilitated by the record short-interest (per CoT data). More curious is which Goldman alum will be appointed as the head of the BoJ once Shirakawa's term expires in March. As Bloomberg noted this morning, Japan’s Chief Cabinet Secretary Yoshihide Suga said, during a speech in Tokyo this morning, the "next BoJ Governor will be a person who shares Abe’s views."

USDJPY weakest in 27 months...


and the JGB curve is starting to look a little out of control...


Charts: Bloomberg

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Wed, 12/26/2012 - 13:37 | 3096528 tallen
tallen's picture

Going Abe-Shit!!!


Also: China's Shanghai Gold Exchange to raise margin requirements

Wed, 12/26/2012 - 14:19 | 3096552 TruthInSunshine
TruthInSunshine's picture

The yen was about 235 to the dollar in the 1980's.

Wake me up when it really makes a dramatic, sustained move, which would suggest that the fractional reserve fiat charlatans & alchemists at Harry Potter Modern Money Mechanics Polytechnic have met around the ole' roundtable, and are choosing which economies to try and "save," and which ones they've decided could "afford" to give up on some of their fiat-manipulated and orchestrated "gains."

(Not that these wizards & high priests of fiat charlatanism have anything other than a miserable record of success in influencing the real economy over anything remotely resembling a long-term or even intermediate term, no matter how many spells they cast and potions they brew.)

Wed, 12/26/2012 - 14:41 | 3096679 Vint Slugs
Vint Slugs's picture

And yen was 620 in the 1950s.  The JGB today gaps below its 200 day m.a.  Time for your wake up call; the worm is turning.  Here's some good links if you want perspective:

Wed, 12/26/2012 - 14:22 | 3096616 LouisDega
Wed, 12/26/2012 - 13:40 | 3096541 LouisDega
LouisDega's picture

Abe Vigoda. Isnt he dead?

Wed, 12/26/2012 - 13:52 | 3096574 Jackfish
Jackfish's picture

Not dead yet.


Wed, 12/26/2012 - 13:54 | 3096578 LouisDega
LouisDega's picture

God bless him

Wed, 12/26/2012 - 13:43 | 3096549 AynRandFan
AynRandFan's picture

Maybe Japan can get away with trashing their currency.  After all, they have an export economy and if they can keep the nuclear plants running a while longer they won't be paying through the nose for oil.

The U.S., on the other hand, imports everything and probably its toilet paper.  The Fed will not win because the American consumer will stop spending.  Fortunately, we will have Marketwatch and the wonderful federal government to educate us that everything is great because figures unadjusted for inflation show lots of growth.

Wed, 12/26/2012 - 13:55 | 3096580 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

the less the us consumer spends, the more shitheads will go on tv and talk about how "consumer confidence" simply must be restored by a new, more massive round of government spending.  The Fed will oblige... as the government spends more and more and the fed prints more money, the dollars in the pocket of the middle class will buy less and less so they will buy less and less, meaning Krugman and his cabal of like-minded economic hitmen will demand... more debt-based "growth."


If Congress wasn't absolutely ineffective excepting on giveaways to Wall Street and the major lobby groups, I'd suggest we print greenbacks to give to the Fed thus 'extinguishing' something like 1/3 of the country's outstanding debt.


Imagine it - our government printing our own interest-free at issuance currency, as the Constitution says, which would compete with the FRN.   


A little over-simplistic, sure, but in essence, I think that's a fix.


The fact no one in policy circles even hints at that should prove to you beyond doubt that they are crashing the currency... whether by design or out of sheer, unadulterated, Ivy League Economist Stupidity... the result is the same.


I say invest in copper.  That is, go around stripping it from abandoned houses.  You can definitely buy a week's worth of H from one house!  You're losing money by *not* doing it!


Or, buy yuan.

Wed, 12/26/2012 - 14:18 | 3096555 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Don't worry - they'll get a nice happy little naval war going with China, and that will fix everything for a while...  there will be plenty of central bank cash flowing to the war pigs.


Then, if they're really lucky, they will be attacked by space aliens. 



Wed, 12/26/2012 - 13:45 | 3096562 Cognitive Dissonance
Cognitive Dissonance's picture

Goldman's Blankfein: "OK, who's on deck for the BOJ position?"

<Batter batter batter SWING!>

Wed, 12/26/2012 - 13:49 | 3096567 fuu
fuu's picture

Mario Monti needs a job now.

Wed, 12/26/2012 - 14:23 | 3096630 Cognitive Dissonance
Cognitive Dissonance's picture

Who's on first?

< It would be laughable if it weren't so very sad.>

Wed, 12/26/2012 - 14:05 | 3096583 Banksters
Banksters's picture

Isn't it ironic.

Failing banks around the globe can get zero percent money and people with good credit have to pay between 4 and 15 percent interest.  If we miss a payment our credit rating gets torpedoed for 7 years and they get emergency aid.  If we deposit our cash they give us zero percent return and they get 9 more dollars to 'loan' out at  high interest.


Gee, now that I think of it, this is a model for economic slavery.  

Wed, 12/26/2012 - 13:57 | 3096584 q99x2
q99x2's picture

Isn't the collapse and depression entering of Japan's bond market and economy, the third largest economy, like a black swan type of thing that could snashelfy projected monetary analysis of US GDP and bank balance sheets?

I mean wouldn't that like throw a monkey wrench into B. Obama's growth engine and put troops on the streets and the jobless into FEMA CAMPS.

At least its not until next F'n year.

Wed, 12/26/2012 - 13:57 | 3096587 Atlantis Consigliore
Atlantis Consigliore's picture

Pardon Bernie; being him in as BOJ;  since FED QE 5-20 on bonds/mortgages, next foodstamps as downpayments,

all mkts insider traded, and front run anyhow. bring in Bernie;

Let Bernie do it....YOU CAN DO IT!!!! Print devalue front run, channel stuff, front run, recylle print buy, recylcle channel stuff print front run;

LOL  pass out those phones....

Wed, 12/26/2012 - 14:15 | 3096617 edb5s
edb5s's picture

Paging Kyle Bass...

Wed, 12/26/2012 - 15:25 | 3096807 CheapBastard
CheapBastard's picture

I'll put on my Fuki radiation suit and visit Japan when the yen hits 120 to the dollar.

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