The myth of Yen

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513 Posts
Anton Kreil posted this 06 January 2013 (Jan 6, 2013 3:52 AM).
 

awesome! nice 

75 Posts
Anthony Walters posted this 13 December 2012 (Dec 13, 2012 11:13 AM).
 

Great post Kwan. Strong fundamental and technical reasons to be involved with USD/JPY. I am about to trade this again shortly.

48 Posts
Kwan Yuen Iu posted this 12 December 2012 (Dec 12, 2012 7:07 PM).

Many people are unsure why the value of Yen was diverge with the Japan economy, I made a graph to explain the appreciation of Yen in the last 5 years.

The graph compare the USD/JPY with the ratio of BOJ balance sheet and The Fed balance sheet (BOJ balace sheet/The Fed balance sheet) . Sicne the middle of 2008, the Fed balance sheet is expanding 2 times faster than BOJ. The currency is evaluated in a relative term, so the Yen appreciated against USD from 110 to 78 in the last 4 years. The balance sheet ratio seems bottom out in January 2012 and the Yen bottom out in the same month as well. The election in Japan will be held on 16 Dec. If the Liberal Democratic Partywin the election (they will probably do). The BOJ mid-inflation target will move from 1% to 2% and they will likely to introduce the ultimate QE. The BOJ will expanding their balance sheet more aggressively in order to flight the deflation.

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