The dollar/yen traded with a 90 handle today its highest level since June 2010. Probably the most popular macro trade of 2013, the move has been supercharged by the country’s deteriorating balance of trade and expectations the Bank of Japan (BoJ) steps up quanto easing next week.
Recall dollar/yen appreciated over 50 percent from April 1995 to April 1997. Some believe that move was one of the factors causing the 1997 Asian Financial Crisis.
Though extended and very crowded with “sell the news” risk going into next week’s Bank of Japan meeting, the corrections have been to brief allow longs an entry point. Looks like nothing stands in the way of a move to 95.
(click here if charts are not observable)
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