JPY / USD part 2

Ok, now for the week's summary.

The yen has been rather weak all week round, hitting a high of 80.75 to the dollar. This compared to an indirect quote of 80.84 to the dollar considering at that exact same time, S(USD/EUR) = 1.3450 and S(JPY/EUR) = 108.7345. Assuming no transaction costs, that is 0.12% riskless profit per yen invested.

Other than that, well there's nothing much to talk about the yen. it has been a pretty uneventful week in the Japanese markets except for the fact that exporters are gaining ground in the stock market due to the weakness of the yen. I believe the yen is already past the turbulent stage where it floats randomly between the 76 and 78 mark. The price of 80 JPY/USD seems to be the new support level. and I can only predict volatility will only decrease when the green back hits the 100yen region. That is where the yen was till the nuclear disaster occurred.

That wraps it for the week's analysis for the yen against the greenback.

JPY / USD part 1

Ok long time no see. My blog will update on what I have reflected on for the currency pair of JPY/USD for the next few weeks. By no means is this a true reflection or analysis of the currency pair. It is just part of a project, and to save paper, I shall note it in my blog instead. Ok so I shall start.

20th Feb 2012

Japan's trade account, its broadest measure of trade with the world, fell to a deficit of 1,475 billion yen, the highest deficit recorded in its 31-year history of records. This topped the previous month's deficit of 479.4 billion yen.

However, it seems that the Japanese market has already priced it in as it closed up a whopping 1.08% to 9,485.09. Add to that the Yen is still rising after trade figures came out, opening at 79.6480 to the dollar then rising to 79.4675. That should be around 0.227% appreciation in just over an hour after the opening bell in the US market.

However, S&P has been quoted to say "the sovereign ratings on Japan are supported by the country's ample net external asset position, relatively strong financial system, and diversified economy." Thus, Japan retains their AA- rating.

All in all, I think Japanese economists are being realistic here, already expecting a few more trade deficits before going back into any surplus. The global economy is just too volatile now, what with the Greek sovereign debt and the entire Eurozone in danger. Even China is affected. Let us not also forget the US and EU sanctions on Iran saying their civilian nuclear research is a veiled attempt at nuclear weapons. That just piles up on oil prices, with the Brent already hitting the US$120 mark and still not showing signs of stopping.

Ok that's it for today. Just a short write up was necessary for a week actually. This is already overkill haha!