TO KILL A MOCKING JPY
*Illustration of OECD countries exports as % of GDP (2000, 2008, 2009)
Once upon a time before Asianmacro became a beach bum, he was one of the bigger swinging d*** in town. The only real advantage is you get the 1st call from everybody, from Goldman, Morgan, Deutsche, Citi, etc …., before they work their way down the list to that Ching Cheong bank or fund right at the bottom, where if you are the poor soul getting that call, you better forget the elation of that A-list investment bank calling you and go do the opposite of what they were telling you!
I got that sense of deja-vu when some relative was elated that her ‘priority banking’ relationship manager was telling her to short JPY ag EUR or USD or AUD .. “‘Does not matter, sure win’, you want to lever up? We can provide you 10x leverage….!” …. ” Even better if you combine that with a ”worst of option” like Nikkei, which is sure to go up because JPY will weaken and Japanese exports will get a viagra like boost!” I was even shown by that relative all the Ching Cheong bank termsheet and even the hot recommendation cum research by the top investment banks that was dropped like manna from heaven!
Anyway, from the illustration above, Japan has about close to the lowest in exports % contribution to GDP at less than 15%. All the talks about a weaker JPY helping to propel Japan out of its misery, well, it may work and probably the markets will always price forward very quickly any of this expectations before the reality sinks in …. which is, it is not going to help much!
I will not go short USD/JPY yet, but sure will be taking profits on any long USD/JPY or NIKKEI at 90.00 and 10900-11000 region respectively. Can these two markets overshoot from here, well yes, like in any bubble, but not yet, ….., time to clear the decks and leave it to the chaps at the bottom of the list to have their own brief moment in the sunshine!
*Asianmacro is a beach bum managing his own wealth. Besides deciding what to have for lunch (or hitting the gym sometimes), he is mostly found listening to loud music while trading and investing for himself. While every care has been taken in preparing the information in and/or materials, such information and materials are provided “as is” without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials. The opinions expressed do not constitute investment advice and independent advice should be sought where appropriate. In no event will Asianmacro be liable to you for any direct or indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached herewith. Asianmacro may already have or intend to have a trading or investment position in the financial instruments or products referred to in this communication. This is not intended as an offer or solicitation for the purchase or sale of any financial instrument and Asianmacro may also have interests different from or adverse to your interests.