Tuesday, August 23, 2016

Japan Says US Who And Still Bad Dollar Action

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*Japan said it expects a whole new round of easing policies to weaken the yen.
*Japan talked about directly selling yen and showed specific disregard to US threats.
*The Fed has been hinting to a rate hike which should help the dollar.
*The dollar has been going down despite these meaningful events.
*There may be stock and bond implications in the dollar's action.
Summary
Last week Japan's government expected another round of easing and the US Fed governors appear to expect another round of tightening. Both cases should boost the dollar but it's not. The dollar has been going down. We call that bad action and it could predict down markets.
Japan More Stimulus For A Weak Yen
Japan officials said last week, "Monetary policy hasn't been eased enough."
In case you didn't know yet, Japan feels it has not done enough. It cornered the ETF market. It cornered the bond market. It ran out of sellers to actually buy bonds. But it has more planned when it meets in September.
Its policies are meant to weaken its currency and turn deflation around to inflation. A weak currency makes goods more expensive (Something you want?) which can drive its goal for inflation.
While Japan has said in the past that it will not let the yen get too strong and would intervene directly into currency markets, the US and the G20 have been opponents. The US has come out many times against such moves.
This time, though, Japan seems to have taken on a tougher tone.
"But I think it is fine for us to take bolder policy measures [on the yen], no matter what the U.S. may say," a Japanese official said.
That tone sounds like a step up and would imply that Japan would directly sell yen into the currency markets. Such a threat or move should get the yen down.
Such calls in the past have scared currency investors to sell yen.
This time it did not.
Let's look at the yen.





Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principal especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS