Forex Investment and Currency Trading

USD/JPY is one of the more challenging currency pairs amount the majors and trading in it requires a higher degree of discipline and patience. Where other currency pairs typically display routine market fluctuations and relatively steady, active trading interest, USD/JPY seems to have an on/off switch. It can spend hours and even days in relatively narrow ranges and then march off on a mission to a new price level.
USD/JPY can offer some of the clearest trade setups among the major pairs. When you’re right in USD/JPY, you’ll also know it pretty quickly. The key to developing a successful trading game [...]

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JPY is surging across the board in the current environment of risk reduction
It is continues to see risks skewed toward further force liquidation related to margin calls of high yielding currency positions on the part of Japanese retail investors, particularly NZD/JPY.
That unwinding will be excerbated by Japanese repatriation in the lead up to the fiscal half year-end in September.
The chart below highlights the period of the sub prime meltdown in mid 2007, which also happened to coincide with the lead up to fiscal half year end, and significant repatriation flows back into Japan (bond flows increased by a factor of [...]

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YEN 1 – 3 Month Outlook
JPY was the third worst performing G10 currency (after NZD and CAD) through the course of June, with USD/JPY hitting a succession of three months highs and EUR/JPY hitting a new record high before correcting somewhat lower at the tail end of the month. In part, JPY weakness seems to reflect the currency adopting the role of “path of least resistance” for USD appreciation in the way EUR did when USD was falling. USD’s appreciation since March has in part reflected the increasingly hawkish stance of the Fed and this has been almost matched by [...]

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Stocks: One of the big reasons to be bullish stocks lately has been the enormous stash of cash on the sidelines, a byproduct of the raging fear in the markets from January to March. But if this massive flood of money is lurking, should we not have seen a big rise in volume as the market broke through the unanimously important 1400 / 1405 level in the S+P? The fact is, volumes on the rally have been pathetic and it seems that the cash on the sidelines is not being aggressively put to work and therefore what we are seeing [...]

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