Just when you thought it was going to look appetizing for importers to again seek out goods from Japan the Japanese Yen began an ascent against nearly every major currency, except of course for the US dollar which is in a tailspin. Much of the pair’s current underpinnings with regard to the Japanese Yen not making gains against the dollar have to do with recent US quantitative easing being done by the Federal Reserve. Such “easing” has caused the dollar to lose value even against the Japanese Yen, which might be a celebrated event among Japanese exporters but for traders it signals an all ballgame.
Everything certainly seems to be going upside down where the Forex market is concerned and we are all certainly not accustomed to these trends but we had better learn quickly. I suppose it goes back to my favorite saying “The first step in knowing everything is admitting that you know nothing” and in this market that certainly is the case is it not folks? However the Japanese are not a nation to be out done in the fiscal arena (or any other for that matter) and are doing their own QE.
In a short while the Bank of Japan will begin to purchase 5 trillion Yen in an effort to ease its own beleaguered economy. Of course whether or not any of these efforts prove effective is anyone’s guess at this point. Vigilance and due diligence at this point will be a trader’s best friend in assessing the USD|JPY for many months to come it seems. The Japanese Yen will almost certainly continue to rise against all other currencies except for the USD due to its impending retracement and improved domestic market conditions. Indeed the United States is still in bad shape, Japan just happens to be in worse shape.
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