USD/JPY:

(CORE) POSITION TRADE
TRADE REFERENCE: CP34
TRADE DIRECTION: SHORT
TRADE STARTED: 19th January 2023
EXPECTED TRADING PERIOD: 2023 and 2024

 

REASONS and THOUGHTS BEHIND THE TRADE:

In times of great uncertainty this pair has had some epic moves and this currency pair has always interested me, although I am the first to openly admit, I am NOT the best with JPY pairs. This is nothing more than a pure MINDSET issue in the past that I have now firmly dealt with.

After the 2008 global financial crisis, the USD/JPY basically saw two huge moves from a V shaped price action. The first was the GFC move itself which saw the Yen strengthen from around 123.00 to 76.00 as the then famous “carry trade” unwound.

in 2012, on the back of very accommodative BOJ policy and in complete opposite to the FED, we saw the move lower retrace back to 123.00.

More recently, the Global Covid-19 pandemic, coupled with Supply Chain issues and the war in Ukraine has fueled inflation concerns worldwide.

To act with these fundamentals the FED embarked on a tightening cycle, in an opposite move, the BOJ remained very, very accommodative and CENTRAL BANK DIVERGENCE was a trading opportunity.

Very recently, in fact December 2022. The BOJ widening its parameters for 10YR JGB purchases in a move seen by the markets of an initial shift in Monetary Policy from Accommodative to a more Hawkish tilt.

The BOJ has pushed back, BUT there is now inflation in the Japanese economy, many would argue the first time in 30+ years! It is this that has prompted the markets to act as they firmly believe that the BOJ will have to act in order to contain inflation.

It is this shift in BOJ Monetary Policy that I want to trade and take advantage of with a potential two-year trade on the short side looking for YEN strength.

 

TRADE CHARTS:
DAILY and WEEKLY

 

TRADE SUMMARY TO DATE:
COMPLETED, EXISTING LIVE and LIMIT ORDER TRADES: