Sent from BlackBerry® Bold 9700 -----Original Message----- From: MeLinda MeLisa <[email protected]> Sender: [email protected] Date: Wed, 15 Sep 2010 12:00:36 To: StockForex<[email protected]> Reply-To: [email protected] Subject: [StockForex] MARKET TALK: Washington May Be Supportive of JPY Move
MARKET TALK: Washington May Be Supportive of JPY Move U.S. is likely to provide implicit support for Japan's intervention to weaken JPY, by withholding criticism, unless Japanese government attempts to weaken JPY over sustained period, says Peter Kenen, professor of economics at Princeton University and former Treasury consultant under several U.S. administrations. "This is aimed at warning people off and breaking the one-way bet that Japan has been experiencing," he adds, noting move, which he calls "both feasible and sensible," will likely be effective to counter upward drift in JPY. USD/JPY last at 84.85, well above intraday low at 82.85 Something similar has happened before. Eight years ago, panic in the global financial markets sent the yen surging 20% in less than two months and other markets collapsed, particularly emerging markets, as investors rushed to repay their yen. Then, as Japan’s economy worsened, the trade became popular once again. The Japanese Yen could feel pressure from a renewal of the carry trade But what is the yen carry trade? Put simply, it is borrowing at low interest rates in yen and using the loan to buy higher yielding assets elsewhere. During the past decade, the trade has become a “staple” for many investors, says William Pesek Jr on Bloomberg. Perhaps the most popular form of the strategy exploits the gap between US and Japanese yields. Anyone borrowing for next to nothing in yen and putting the money into US Treasuries (US government bonds) has received a double pay-off: from an interest rate difference of more than three percentage points and from the dollar’s rise against the yen. Investors make their profit when they reverse the trade and pay back the yen loan. A carry trade strategy seeks to profit from the interest rate differential between two currencies. The approach is to select a currency pair where you sell (go short) a currency with a low interest rate, while simultaneously buying (going long) a currency with a higher interest rate. When you hold this currency pair open in your trading account, you must pay interest on the short position, while you receive interest on the long position. If you receive more in interest than you pay, this difference – known as interest rate carry or simply carry – is retained in your account as profit. Does that mean the yen carry trade is back today? Intermoney.org - Market Talk Wednesday. September 15, 2010 ------------------------------------ ## StockForex ## _________________ ::Forum:: All about Forex and Stock Trading ; all currency pairs. All Major World Indices, Asian Stock Index. and Individual/single stock. We're not goin' anywhere Well, it's all right here. Enjoy it !! :) _________________ http://finance.groups.yahoo.com/group/StockForex Yahoo! Groups Links ------------------------------------ Kunjungi situs http://www.info-saham.com untuk informasi seputar saham. SEMUA POSTING DI MILIS INI TANGGUNG JAWAB PENGIRIM EMAIL DAN BUKAN ADMIN MILIS. SEMUA POSTING DI MILIS INI BUKAN UNTUK MENGAJAK MEMBELI ATAU MENJUAL EFEK. SETIAP KEPUTUSAN INVESTASI MENJADI TANGGUNG JAWAB PIHAK PEMILIK INVESTASI ATAU PEMILIK MODAL. [email protected] untuk berhenti dari milis saham [email protected] untuk bergabung ke milis saham Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/saham/ <*> Your email settings: Individual Email | Traditional <*> To change settings online go to: http://groups.yahoo.com/group/saham/join (Yahoo! ID required) <*> To change settings via email: [email protected] [email protected] <*> To unsubscribe from this group, send an email to: [email protected] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
