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The Dummies Guide To Trading USDJPY
Having trouble deciding whether to join the herd? Unsure if Abe and Kuroda can unilaterally take on the world's central banks? Worried that surging inflation in energy and food costs in Japan will force the BoJ's inflationary resolve to crack? The following flow-chart from HSBC provides an at-a-glance decision-tree for whether JPY weakens to over 120 or strengthens back to 80...
(h/t @JEliasof)
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My bet would be 85.
The Dummies (aka Muppets) Guide to trading everything:
If you know you are a dummy, do not trade. These are treacherous, manipulated markets.
Even if you are NOT dummy, no charts can apply to manipulation.. Heck, yeah, that's including PM's too. Support/Resistance my A$$!
http://www.youtube.com/watch?v=DyGl1iVBmXM
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Tyler already had this up today, it was an interesting read.
Richard Howard of Hayman Captial has a much better explaination of the were the Yen is going.
http://kylebassblog.blogspot.ca/
IMF Primary Commodity Prices. No inflation, just move along.
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That flow chart looks like the old Abbott & Costello "Who's on First" comedy routine, only in words, numbers and arrows.
Wow. Now that's a cool tool. Wish I had one for every currency pair.
Thanks.
:D
Haven't the Japanese already said that the sweet spot will be 95-120? Can't see much outside of this region, apart from sinking to zero for the arrival of NWOBux.
I've seen the figures they deal with on the daily basis - trillions, tens of trillions.
Time to cap it at 100 to the USD and then redenominate by 100.
Voila
The problem with such an approach is that it makes that the dollar-yen exchange rate exclusively a function of what happens in Japan. Yet we all know that price of a currency is always relative to another currency or currencies. I have argued on these pages that the yen's weakness was partly a function of step back from the edge of the abyss by the European Central Bank, for example.
Even if one wants to look at purely domestic developments, are not capital flows important? And what about the evolution of its external accounts?
Lastly, as a fellow institutional strategist I am suspicious of the illusion of precision. It is deceptive.
"Lastly, as a fellow institutional strategist I am suspicious of the illusion of precision. It is deceptive."
It may not be so deceptive. Perhaps they are using technical analysis, such as Fibonacci levels, channels and trendlines to render an algorithm to follow the pair as it transits these major changes.
It may not be precise but you can see where their thinking is and that is at least somewhat helpful, no?
:D
Orly, perhaps you are right but I remain skeptical and suspect the the levels are quite arbitrary. Technical analysis is similar to what Keynes said about markets in general in his comparison to a beauty contest. The trick is not to pick who you think is most beautiful but who others think is the most beautiful. That means that such technical analysis is to "guess" where supply and demand will come in. That means one needs to draw one's trend lines and retracements that others will use to spur their own activity. Fibo retracements are commonly used, but I do not see those levels through various Fib relationships. My larger point is worth considering. Does the chart capture all the key variables that drive the yen ? I say no and that it is fundamentally incomplete.
Place yer bets - Round & round it goes, where it stops? Nobody knows!
Fuck the Yen - not touching that... Well, maybe tickle it with a small position, once it decides where it wants to go. :)
".....once it decides where it wants to go."
Markets don't move, markets are moved. This applies in every way, shape and form to currencies. Ole Abe is either gonna move the currency herd or the currency herd is gonna move him. I suspect it will be both. Watch out for that back splash Abe.
I can't wait until the big guns really get pissed off desperate in this currency war. Then we're gonna see volatility like we have never seen before. The ground will shake, rattle and roll when the currency herd is repeatedly spooked and bolts from cover to cover.
Precisely what I meant.
The relevant people need to flap their gums first, though.
Japan could be used as a catalyst for a currency war - they're a puppet and if the Rothschilds want Yen to head to 150, it will go there, followed by every other exporting currency on the planet.
Followed by war.
"Followed by war."
Strangely I did not see war mentioned on the flow chart. It must be included in the double secret 'private' version reserved for the currency Muppets.
Well, have to keep the peasantry at bay - they're getting restless.
Not me...good luck to you.
Back to 80? LOL.
http://eideticresearch.com/uploads/2/8/3/4/2834543/jyen_dec13_2012_hs_ch...
Ben can do it!
Forgot the World-Slips-Back-Into-Global-Recession-Which-Sends-Bidders-Back-To-Yen node, but looks generally agreable otherwise. Apply a dampening factor to those upside moves, and you've got a really agreable piece of analysis.
Japan represents a serious threat to Globalist designs. (Can't let this shit outa the bag yet). I would look to significant devaluation. Rather than 'prop up' a currency, they will look to 'prop up' a model within their grand design.
Japan has utterly failed to support the deceptions of Keynesian rubbish and so therefore must be salvaged at all cost. The cost will be at least USD/JPY 100.00.
Perversely, the $$$ may be allowed to strengthen dramatically as the final stage is realized. Once all is set, they may crash the $$$$ as the final move to the global currency......No other fiat shall remain viable as the role of a reserve currency.
They sure as shit won't go metals standard voluntarily.
The Yen should already be well north of 100 to the dollar.
The table is in any case far too limited. No external and non economic factors are taken into consideration. But shocks always come from what you do not expect... by definition.
Gold and Silver .....No other way
The Kyle Bass decision tree is only the top branch.
All this talk, no mention of petroleum ... all of which Japan must import.
It can import with dollars (as does China) but only for so long. Japan does not possess China's dollar reserves, it has not needed them as the yen has always been acceptable to fuel suppliers.
If the yen is sufficiently depreciated (as by panic) the fuel suppliers will not accept it and demand more dollars instead.
A similar situation existed in Russia in 2009 as that country paid overseas claimants with dollars as roubles were unacceptable. Soon enough, dollar reserves in Russia were reduced to a dangerously low level. It was the collapse of foreign currency reserves that had destroyed the Soviet Union, it was a grave danger that Putin was desperate to avoid, It will certainly be so the Japanese.
Dollars = gasoline.
From here it looks like endgame. If the Japanese cannot regain their current account surplus there is a deflationary spiral as the country's private sector finally deleverages. When the public sector begins to delever, the outcome is Japan government insolvency (as by Fisher). If Japan's central bank leverages itself, it becomes insolvent and there is no lender of last resort. The result is a run out of Japanese banks (which looks to be underway right now.)
Japan is interesting, unlike Europe it has its own currency, its treasury can issue yen to retire debt, extinguishing the self-created currency at the same time. However, this is probably impossible b/c the Japanese banking system is insolvent and govt issue of demand notes would likely cause that system to collapse.
Steve, excellent!
The Japanese yen right now is the object lesson to the rest of the fiat world. Bet you the world won't comprehend it.
That was hilarious up at the top where, without an explanation you get the option of "Achieve inflation and prices stability" or "Uncontrollable inflation" from exactly the same choices.