More Liquidations from Yen Carry Traders
Started by
redfoliage2
, Mar 05 2007 08:44 AM
3 replies to this topic
#1
redfoliage2
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Posted 05 March 2007 - 08:44 AM
US dollar index up 0.50 while Japanese Yen up more than 1% against US dollar. The Yen carry traders either have to liquidate more or they are going to be hurt further from both unfavorable Yen and US stock market.
#2
arbman
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Posted 05 March 2007 - 08:55 AM
I think the other currencies are feeling the heat worse than the USD, this is good news for the US equities. It means the new carry trade is actually to borrow in the other currencies and invest in the US markets. The Yen related sharp changes happened when the BoJ drained the significant amounts last summer too...
I believe this decline might mark a bottom for a sharp reversal now, we just need to see the breath momentum turning in the next few days for a significant bounce at least. The global liquidity picture and the valuations have significantly changed though...
- kisa
I believe this decline might mark a bottom for a sharp reversal now, we just need to see the breath momentum turning in the next few days for a significant bounce at least. The global liquidity picture and the valuations have significantly changed though...
http://ichart.finance.yahoo.com/z?s=USDEUR=X&t=5d&q=&l=off&z=s&c=USDCHF=X,USDGBP=X,USDAUD=X,USDCAD=X,USDJPY=X&.png
- kisa
#3
redfoliage2
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Posted 05 March 2007 - 09:17 AM
The problem is that no other banks offer their currency as "free money" like BOJ.I think the other currencies are feeling the heat worse than the USD, this is good news for the US equities. It means the new carry trade is actually to borrow in the other currencies and invest in the US markets. The Yen related sharp changes happened when the BoJ drained the significant amounts last summer too...
I believe this decline might mark a bottom for a sharp reversal now, we just need to see the breath momentum turning in the next few days for a significant bounce at least. The global liquidity picture and the valuations have significantly changed though...
http://ichart.finance.yahoo.com/z?s=USDEUR=X&t=5d&q=&l=off&z=s&c=USDCHF=X,USDGBP=X,USDAUD=X,USDCAD=X,USDJPY=X&.png
- kisa
Edited by redfoliage2, 05 March 2007 - 09:19 AM.
#4
arbman
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Posted 05 March 2007 - 10:49 AM
The problem is that no other banks offer their currency as "free money" like BOJ.
Good point and the next cheapest money is or was probably in United States, which goes to the point that the US markets had an inflationary blow off for the past 3-4 yrs and now not one but both of the cheap liquidity sources are going away...
