4 replies to this topic

[flyers&divers]

I seldom take positions these days but I am nibbling at the March Yen futures.(I will switch into the June contract when appropriate) It has retraced 50 percent of the initial burst of carry trade unwinding and it is close to the horizontal support of recent highs at .008441. If this carry trade business is even remotely as monumental as it sounds there will be plenty of action in the JPY/USD. At a minimum we should challenge the highs at maximum we may have seen the lows for some time. I am not posting a chart for this setup but on Monday I will find out from TradeStation support how to do it and my next FF will have a chart attached. Regards, F&D

[jawndissedi]

Interesting trade -- this should help:

Bloomberg

[cafeflorida]

This summer's Yen power move will be a truly great trade. FXY would be about all that I'd want to work with, though.

[pdx5]

So let me understand what F&D is saying...Yen is going to rally against the US dollar and perhaps the Euro? And if that is correct, will not that give a left hook to the Yen carry trade?

[flyers&divers]

If the BOJ raises rates or even if they keep talking that possibility the Yen will get stronger and people who borrowed it at 1/2 percent per annum (on margin basically because they leveraged it on the other end) will scramble to buy it back to repay their loans. We are talking about trillions not millions. It will take a while. If the rates in the US rose dramatically that would cancel some of this effect. The way things look they can't raise rates dramatically here they may actually have to lower rates which would magnify the effect. I am a technical trader and I may be out of the trade in a few days but it is good to know which way the overall dynamic is leaning. Regards, F&D