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USDJPY Hits 118 - Abe's Worst Nightmare: Weaker Currency, Weaker Stocks
Having kneejerked higher, stocks read the most important section of the FOMC Minutes - that they will not be rescued next time - and decided it was time to take some off. This is clearly not acceptable and so USDJPY was leveraged ever higher and just broke 118.00. The problem is... US and Japanese stocks are entirely decoupled from this surge in the momentum igniter...
The JPY ignition is not working...
In Japanese stocks...
And US...
Since the FOMC Minutes...
Charts: Bloomberg
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Oh SHIT! R.E.A.L.I.T.Y!
For an economy that is 60% consumer spending, the last thing you would want to do is wreck the currency and import inflation. Yes, it helps the 15% of your economy that is export based, but kills the majority with inflation.
We can start writing the book on the Abe Republic now.
i guess abe figure housewives no match for tanks
we'll see
He is just lucky that oil prices are down for now, otherwise it would be worse.
can you elaborate on your point? a coordinated drop in oil prices to help keep a lid on Japan?
All I was saying is that inflation is set to go ever higher in Japan with the falling yen (import prices rise) and they are very dependent on energy, so the declines in oil globally makes the hit to the consumer from a falling yen easier to bear.
WE'RE GONNA NEED A BIGGER ALGO!
maybe the quote of the year........
I Abe had any honor he'd fall on a sword.
BAHAHAHAHAHAHAHHAHAHAHAHAHAHAA!!!
Ok... wait a minute...
BAHAHAHAHAHAHAHAHAHAHAHA!!!
Oh man this is getting fun! Just keep stacking the physical bitchez!
Promising loose money only works if you've told people that maybe you won't have loose money anymore.
When do we see a massive hedge fund explosion from somebody being wrong a huge leveraged bet on the Yen direction?
That is a big move in a short time.
So when will the Nikon lens my wife wants for Christmas get cheaper?
After Christmas.
All joking aside -
why do I never see any 'Hannukah' commercials when otherwise, from TV sitcom to educational cable show to movies - I can scarecely go 3 days without some reference to Jews and Judaism?
Also, its a wealth and successful demo...
I've seen George Foreman telling me people turn to him for help marketing inventions dozens of times and not a single commercialization of Hannukah gift buying.
Just seems odd.
It's because practicing Jews make up 2% of the US population. There are many fewer than people think. You do see some where jews live, which is in NYC and LA. And that's also why there is overrepresntation on TV.
That makes sense as part of it, but I suspect there may be more going on. Not a sociologist, or studied it, but find myself interested in broadly 'sociological' issues the more I hear/learn about "progressive" thinking.
Me, too. I can scarcely go three posts on ZH without coming across some idiot flogging this long-dead Nazi horse. Apart from that, I got nothing.
which 'horse' was National Socialist, exactly?
Careful - I'll point it out if you engage in a logical fallacy!
DXY on a nice ramp
screw you, FOMC
Yes, the hour is nigh, dominoes picking up speed.
yeah ... no doubt a few stick saves between the here and there ... but in parlance of "it takes forever, and then all at once" ... i feel the tremors
Can smell it from south Florida.
If one CB is discredited ,they all are.
Their fallibility will be exposed.
exactly. Japan is the model. They sent us cars for 60 years and took UST's. China looked at it and said "we can do that." Actually China mostly makes low quality crap for Walmart, but they took UST's. Chinese Party officials commended Japan for figuring out the model: 1st Workers work, and government gets wealthy. 2nd Everything goes through Tokyo. 3rd Don't spend $$ reserves, borrow against them. So now, debt is in JPY and assets are in USD....see why the rally matters? CCY mismatch. Debt and assets are roughly equivalent. About now they start really going into hock. Japan is wealthy, but its citizens, not so much. The men can't find work, so the women just aren't that interested. Every tourist in the US should be Japanese...wealthy with Dollars to spend. Where are they? By now the ruling cadre must be very, very nervous.
they have bigger problems.
The kids don't want to fuck anymore, and thems that do are increasingly irradiated.
Long Japanese X-men.
pods
What happens when China responds to this latest yen devaluation, which they see as forcing them into a full-blown currency war? Keep sight of the historical pattern: first currency war, then trade war, then war war.
Bring it On!
i got 2 boxes of orville redenbacher on hand
Hell I've gone through about 24 lbs of popcorn already. Waiting patiently...
Let's see a free-falling yen and massive inflation. That should fix everything.
Nothing fears a banker more than all faith in your BS is lost.
Kuroda: "Draghi-san, it's your turn to do some QE and devalue the Euro a little."
Draghi: "Why do QE when talk accomplishes the same thing my friend? And my money is Euro denominated. The only thing I can say to you at this point is 'do not worry'."
Pouring more gasoline into the carbuerator ain't gonna help when there's no oil in the crankcase, and encouraging everyone with "the engine will start any minute now," is gonna result in someone getting a box wrench shoved in their mouth!
What a travesty... Based on the DXY and the sheer oversold levels of ¥ ACROSS THE BOARD, I'll be looking for a retrace over the next few days.
The trade is highly leveraged in general and I'd say some rebalancing(profit taking) is coming. The Yen trade is rapidly approaching a point where it's not advantageous in "nominal terms" to be long the Nikkei. If the JGB market moves 20-30 basis points it will trigger an event.
At this point the yen is the most ridiculously one sided trade I've seen in my years trading forex. This has got to take a temporary step down soon before it resumes a move higher. It's beginning to look like a trap.
I concur my friend. The train is running "full steam" ahead, without a conductor. I have a small macro trade from the high 114's open.
Other than that my powder is dry for a 38.2 retrace back down to the 112.00-110.00 area. When the "long covering" (profit taking) happens it will be fun. ;-)
Agreed on the 112-110 range. I've got a limit at 111 and expect a bounce to 120 from there. Good luck. The last two quarters have been ones to remember. :)
The Nikkei is just as manipulated as the US market. A weaker Yen/weaker market in the run-up to the December snap election means Abe is done. Someone else will appear who will be completely beholden to the banks and corporations without regard to the people. That means slashing corporate tax rates, higher consumption taxes on schedule this spring, and new policies designed to suck money out of the aging savers (perhaps cutting benefits/health services to force spending). Aso (Abe's Finance Minister) has already claimed a delay in the consumption tax hike is a mistake. Perhaps he is stepping up for a second run as PM himself.
Maybe they just need to dump gold harder. 3000 contracts is chicken feed.
Things will probably continue as usual for quite some time. Look at Argentina, Venezuela etc. Mere speedbumps of concern. Japan's is much more important. The masters controlling the puppet show has their back. When their meltdown happened 20 yrs ago people have been wondering how it is that they are still around.
usd 95!
yen 150!
yuan 10!
euro dollar parity!