RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The Japanese Yen has now officially moved to bullish trend.  For those of you following me for the past few months, this was a currency that we’ve had on our radar for a bearish to bullish phase transition. Aside from the Yen’s safe haven status, we could be in the beginning stages of the unwinding of the Japanese carry trade (borrowing yen at extremely low Japanese interest rates and investing in outside foreign currencies, typically the U.S. Dollar). We’ve heard little hints out of the BOJ, since the summer months, that they could be on the brink of allowing the yields on the JGBs (Japans 10yr Treasury Note) to float marginally higher, albeit still at accommodating levels.  The BOJ has also been quoted as saying “the ultra accommodative monetary policy of the the past decade has begun to have negative impact on Japanese economic conditions).  The market is clearly overbought at the moment, but I’d consider scaling into a Long Yen position on pull backs to the low end of our trading range ( .009150 to .009100 in the futures OR the upside down of 111.00 USD/JPY in the F/X).

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. Prior to becoming a broker he did some individual trading on his own, where he first began to study and interpret different market strategies and ideas. In 2006 John moved over to Lind-Waldock where he began to service clients as a professional broker. He joined RJO Futures in 2011.
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