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Wednesday, January 21, 2009

Yen: Something Broke Somewhere


Cris said...

So if yen weakens market goes up, isn't it?


Doug said...

Chris, you are looking at it backwards. When the holders of yen decide to invest in the US stock market, they need to buy dollars ( thus sell yen ). This causes the dollar to go up with relation to the yen.

When they want to get out, they need to sell dollars and buy yen, so the dollar drops.

Some really huge Japanese fund must have sold all their US positions or something today.

The Japanese government wants to keep the dollar/yen above 90, so they will buy dollars or treasuries if it drops below that.

Anonymous said...

I'm not seeing this reflected in FXY, maybe this is just a bad data point?

Anonymous said...

“There was a large options trade which has now expired,” said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. “This is just allowing the yen to do what it couldn’t do for the past 10 days or so.”

Traders abandoned the dollar when option contracts expired at 10 a.m. New York time, causing it to “collapse” versus the yen, according to Brian Dolan, chief currency strategist at, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey.

Anonymous said...

A yen costs more now in US$, was once 95 yen to the buck, now less than 90.
The yen is strengthening, not weakening. Against the Euro and the Pound, too, unless I'm mistaken.

Brian said...

Incredibly opportunity to go long USD/JPY on the double-bottom. Reversed practically at the very tick of the '08 low. The action was fast & fierce when it touched that level, had to act very quick.