There’s A Kind Of Hush – Just Before The Ride in USD/JPY

A friend once told me you are in trouble once you trade on HOPE.

It is not Hope that is keeping me going for USD/JPY.

Tomorrow the G7 Finance Ministers meet in Tokyo without the China fella. I believe there is silent sympathy for the plight of the Japanese and I cannot remember the last time the major central banks did the JPY intervention concertedly (should have been sometime in Mar 2011).

The MoF has said on Tuesday that the Japanese government would tell the EU that the country is ready to buy bonds issued by the ESM. Recall the amount should be USD 60 bio.

This would send a statement right into the heart of Beijing and their uppity noses and punish their scions for selling USD/JPY from their pagoda offices, hiding behind their daddies when they hit a loss, disclaiming the entire amount to reserves (just fantasising here but we do know that they are avid gamblers).

Zerohedge : President of China Sov Wealth fund Gao tries to avoid relying on financial models because he doesn’t trust them.

Well, divination is easy when you try to play God. (You can quote me anytime on this one)

Look at the chart above. It was not always like this. Something happened to Japan after QE1 and 2 and now 3.

I do not think its because they have not done enough. Their DEBT/GDP is 211% for goodness sake. I say they are just unlucky.

The conclusion is that there is no loss to buying USD/JPY. I still target 83.00 near term.