Time to be short of JPY

The Yen is weakening against most crosses, not just weakening against the USD, and against the other non-US dollars, but is weakening relative the EUR as well. Even if we were to forget about the panic that occurred May when the USD fell 7 “Big Figures “against the Yen in a matter of just two days, then proceeded to bounce back 5 of those same “Big Figures” USD following, The Yen’s highs made in mid June are not inviolate, and highs that were made last week just below 91.00 are holding currently. Non us dollar are trying very hard to strengthen, I should say JPY is trying very hard to weaken. I believe it will weaken in the coming weeks and we intend to be short of JPY and long of CAD .

Japan’s businesses will require a considerably weaker JPY just to survive. Japan is still an export driven economy, and export driven economies, last time we checked, require weaker currency valuations, certainly not stronger ones. Japan are a dramatically ageing nation and so it relies heavily on exporting. Japan will not be a consumer driven economy again, China holds that crown in that part of the world. So Japan will have to export its way to economic safety

 New Prime Minister Mr Kan has made it very clear he supports weaker JPY and who are we to argue with this and technically CADJPY is starting to setup and so we’ll start nibbling long of this cross now. I’ll review how we’ll initiate this position in tomorrow’s members pre-market video. 

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