AUTOREFRESH 
Quiet as we await the Tokyo open
By David Horton || August 19, 2010 at 23:21 GMT
|| 8 comments || Add comment
Looks like we the risk selling tone will be the gambit as the Nikkei will open much lower; should be a day for BOJ officials to be talkative as the market is likely to test their mettle
After several sessions we are still eyeing the low supports levels of recent ranges as Sean mentioned earlier and while I cannot see them breaking in Asia ( famous last words) they are likely to come under scrutiny in early Europe barring surprises.
Safer to be sidelined and watch the possible breaks, or for those longs at least the stop levels are evident
yep….i guess one could say the tone could favour a risk off friday….however i wouldnt imagine any big moves considering the ranges we’ve been seeing this week….i’ll just wait to trade what i see…trading what i think has always got me in trouble
Just looking at the TFX Japanese retail investor data, USD/JPY long ratio is up to 83.1% now and the AUD/JPY long ratio is up to 82% (data as of 8/19). Longs have also increased in EUR/JPY and GBP/JPY over the first part August. None of this has borne much fruit of yet though has it.
fxgai
there was a research done from june 00 to june 08. the carry trade by retail investor earned a handsome 12.5% pa in interet differential alone, and further 10% pa investing in the S&P or the All Ords. the crash of sept 08 which aud/yen declined 30% in 2 months was considered an anomaly. overall retail investor earned more than buying stocks, JGB or treasuries.
haniff, interesting! I’m skeptical that we’ll get another similar period of carry trade heaven going forward, but it looks like the Japanese are still keen to sell their currency. With all the press that the strong yen has been getting lately it may help to bring more yen sellers to the market.
fxgai
the typical japanese housewife buys and holds for at least one year, some keep up to 5 years selling yen. the stronger the yen goes the more they are short. they cannot get this sort of returns elsewhere unless they want to buy russian stocks or bonds. you can do this too but must have deep pockets and strong stamina but the returns are good. if they smell something like sept 08 scenario they will do a temporary hedge.
h+s on h1 EUR/USD in case u havent seen it…
Actually, I admit to holding my fair share of unleveraged AUD/JPY longs
And I intend to hold until it hits 90, whenever that may be. Still I think it’s a somewhat dangerous strategy, and probably won’t do it again in hindsight. Not for me. I’d rather be flat so as to have a) more capital free for other short term trades b) more objectivity when looking for short term trades. I don’t like to trade AUD/JPY short term now because of my longer term bias, and there’s an opportunity cost in that. This may not apply to housewives saving up for retirement though of course.
.. and also I’m becoming wary of the “new normal” stuff.