Boris and Kathy's FX Blog www.bktraderfx.com
10/16/2006
Today's Email Alerts:
Russia Loves the Yen and So Do We
Over night news that the Russian central bank is diversifying a portion of its reserves into the Japanese yen and we think its wise to follow their lead. Over the past two weeks yen news has become decidedly bullish for several reasons
1. Last Friday’s surprising statement by BOJ Governor Fukui that the central bank will consider raising rates by 25bp before the year end.
2. Record yen short positioning readings in the latest IMM data from CME which suggest that the carry may have become too much of a one way trade, setting up the Johnny-come-lately speculative accounts for a possible nasty turn in the pair.
3. Upbeat readings from the latest Eco Watchers survey which over the past two years tended to be an excellent forecaster of near term yen direction.
Therefore we recommend shorting USD/JPY at market currently 119.18 with a stop at 119.80 Our T1 profit target is 118.72 at which point we move the stop to breakeven. Our T2 target is 117.85
Russia Loves the Yen and So Do We
Over night news that the Russian central bank is diversifying a portion of its reserves into the Japanese yen and we think its wise to follow their lead. Over the past two weeks yen news has become decidedly bullish for several reasons
1. Last Friday’s surprising statement by BOJ Governor Fukui that the central bank will consider raising rates by 25bp before the year end.
2. Record yen short positioning readings in the latest IMM data from CME which suggest that the carry may have become too much of a one way trade, setting up the Johnny-come-lately speculative accounts for a possible nasty turn in the pair.
3. Upbeat readings from the latest Eco Watchers survey which over the past two years tended to be an excellent forecaster of near term yen direction.
Therefore we recommend shorting USD/JPY at market currently 119.18 with a stop at 119.80 Our T1 profit target is 118.72 at which point we move the stop to breakeven. Our T2 target is 117.85
posted by BKTrader # 10/16/2006 06:34:00 PM 
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