If the Yellen had an idea how this worked the US and ECB would be buying YEN in support and driving the YEN higher in an effort to calm Asia---see S.Korea and Indonesia and the Yen/Yuan cross for confirmation.The Eur/YEN is a mjor problem for Germany and the Swiss but more importantly coordinated intervention would take pressure off the Japanese to raise rates with the potential for causing a problem for the U.S. bond market and probably others.Look to Bob Rubin's Tresury intervention in June 1998 as Bill Clinton was headed toBeijing and the US intervened to strengthen a weak YEN at the behest of the Chinese---looking at 2022 intervention bythe BOJ /MOF is very myopic----the weak YEN is a real problem for the global economy
Takatoshi san:equilibrium is undefined so while I admire your view on the effectiveness of intervention the measures of underlying fundamentals are distorted by the global currency trade which is playing havoc with Asian currencies hence the surprise increase in the Indonesian interest rates two weeks ago.It does not take a great deal of money to end the momentum driven trade resulting from speculators piggy backing on the carry trade.How is this affecting Yellen's fear of China dumping goods on the global markets as the Yuan is tracking the YEN as close as possible-----crush the global carry trade with its love of borrowing in YEN and the YEN returns to a more balanced 135 dollar yen or lower.The US is sitting with BENIGN NEGLECT but it has huge implications for advanced industrial production in the U.S. and certainly Germany.Japanese defense industries will attain a huge advantage on the global scene because of the disequilibrium of the YEN on global markets
Great commentary! Would love to see your data, charts on "does not take a great deal of money to end the momentum driven trade " from speculators piggy backing on carry trade. Is yen weakness solely driven by that? How much of this is Powell signalling rate cuts ain't comin, as soon as market types expected, nearly demanded and overran Ueda's "historic" move out of negative rates? To be continued!
If the Yellen had an idea how this worked the US and ECB would be buying YEN in support and driving the YEN higher in an effort to calm Asia---see S.Korea and Indonesia and the Yen/Yuan cross for confirmation.The Eur/YEN is a mjor problem for Germany and the Swiss but more importantly coordinated intervention would take pressure off the Japanese to raise rates with the potential for causing a problem for the U.S. bond market and probably others.Look to Bob Rubin's Tresury intervention in June 1998 as Bill Clinton was headed toBeijing and the US intervened to strengthen a weak YEN at the behest of the Chinese---looking at 2022 intervention bythe BOJ /MOF is very myopic----the weak YEN is a real problem for the global economy
Takatoshi san:equilibrium is undefined so while I admire your view on the effectiveness of intervention the measures of underlying fundamentals are distorted by the global currency trade which is playing havoc with Asian currencies hence the surprise increase in the Indonesian interest rates two weeks ago.It does not take a great deal of money to end the momentum driven trade resulting from speculators piggy backing on the carry trade.How is this affecting Yellen's fear of China dumping goods on the global markets as the Yuan is tracking the YEN as close as possible-----crush the global carry trade with its love of borrowing in YEN and the YEN returns to a more balanced 135 dollar yen or lower.The US is sitting with BENIGN NEGLECT but it has huge implications for advanced industrial production in the U.S. and certainly Germany.Japanese defense industries will attain a huge advantage on the global scene because of the disequilibrium of the YEN on global markets
Great commentary! Would love to see your data, charts on "does not take a great deal of money to end the momentum driven trade " from speculators piggy backing on carry trade. Is yen weakness solely driven by that? How much of this is Powell signalling rate cuts ain't comin, as soon as market types expected, nearly demanded and overran Ueda's "historic" move out of negative rates? To be continued!