+ 9.45
+ 3.01%
+ 6.79
+ 2.2%
+ 9.42
+ 2.48%

Yen is Done Strengthening

February 22, 2012 12:43 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Yen is Done Strengthening

In our last article, we asked if the yen is done strengthening and if it will continue to weaken.

Since then, the market has answered the question quite clearly. The yen has successfully bounced from the 75.9 level and has now surged past the 79.5 level without any hint of pullback.

When a currency starts a new trend, it usually takes a long time before that trend is reversed. Consider that the yen has strengthened since 2007, taking USD/YEN all the way from 120 to 79.5 late last year.

If the current weakening is a new trend, there’s a long way to go. In fact, when considering that the yen was around 83 before the tsunami last year, a return to that level is not only possible but probable.

For those who think Greece has a debt problem, Japan’s GDP/Debt ratio is > 200%.

Unlike Greece, which tied itself to Europe and thus cannot print money at free will, Japan has its own printing press and has been using it for a long time. It was outmatched by the US after the financial crisis, but we believe it will continue its course – and all the traders who had been making money by buying the yen in the last five years will be reversing the course once they sensed that their trade is now in danger.

Thus, for this USD/YEN trade, sell when you can, not when you have to!

Related Articles

Here's How To Capitalize On The Transition To Renewable Energy

According to Mirova (Natixis Investment Managers’ affiliate), energy transition offers opportunities not only in solar and wind projects but also in the hydroelectricity, biogas, electric mobility and hydrogen industries read more

Warren Buffett Says Berkshire's Apple Investment Shows The 'Power Of Repurchases'

Berkshire Hathaway Inc (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett over the weekend read more

Benzinga's Weekly Bulls And Bears: Airbnb, Apple, Kroger, Starbucks, Tesla And More

Benzinga has examined the prospects for many investor favorite stocks over the past week. The week's bullish calls included the iPhone maker, the leading electric vehicle maker and a couple of reopening plays. read more

Will Bitcoin, Ethereum Or Dogecoin Grow The Most By 2022?

Every week, Benzinga conducts a survey to collect sentiment on what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios. This week we posed the following question to 1,000 Benzinga readers on the 2021 price action of Bitcoin (BTC), Ethereum (ETH) and Dogecoin (DOGE). read more