USDJPY will continue to climb. BOJ has been trying to make that happen with periodic purchases (leading to spikes in charts) even before Kuroda took office.

It's a grand experiment, success or failure both lead to weaker yen (either successfully inflating the currency or crashing the economy) in a 2 to 5 year time frame.

My guess is 120 to 140. Around that area Japan will become a solid net exporter again (they've been net importers, mostly due to higher energy prices recently) and it's right about where the BOJ stopped trying to weaken the yen even more in the 90's.

Haven't they been trying this same kind of stuff since 1989? I understand that they want to create inflation but is that always possible without cooperation from the markets? I read some stuff by Kyle Bass and he says they aren't making enough purchases to actually create inflation.

I just look at the price action and to me it looks pretty bearish I was just curious what other people thought.

To be totally honest with you, I am undecided. It's true in the grand scheme of things, the money the BOJ is pumping into the system is trivial and will not actually cause inflation unless the banks and consumers alter their behaviors accordingly.

But that's besides the point with regards to speculating on USDJPY.

Essentially the bet is Abe and Kuroda are committed to ramping up their version of QE in addition to weakening the yen. This is an easy bet because, at least in the short term, QE and weaker JPY both have stimulative effects. That will keep them both in office for at least 2 years, weakening the yen the whole time.

If it works, they keep weakening the yen all the way up to the general election in 2016. If it doesn't work, well, **** hits the fan and yen drops anyway while they hold special elections to get someone else to clean up the mess.

Disclaimer: I have nothing riding on this. It's more ramblings and thoughts on the situation than a prediction with conviction I'm willing to bet on. That said, I think you have to be an extremely brave man to bet against a central banker with an unlimited bankroll.

well, i did not sell and i do have currency protection to the euro. i still think the market is clearly undervalued compared to the US market especially. so far the program seems to be working in the real economy and i still think that monetary expansion AND a higher inflation target will lead to a temporary boom in the stock and housing markets.
evaluated in $/Euro the Japanese market is very cheap especially considering that all exporters have gained a big competitive advantage due to wages being down 30% measured in euro or $. the volatility is surely scaring away some buyers right now but this should mean it is a good time to get in right now.
there is a real paradigm shift here, should the 2% inflation target be reached (through wage increases), which i think it will be ultimately, 20000 for the nikkei is a reasonable target.

the market is rightfully somewhat volatile because the way this is conducted, spending will be highly sensitive to global interest rates. if global interest rates rise because private spending recovers this will work better and more explosive than if other countries stay in the liquidity trap, because than all the extra money printed will be more likely to be spent.

Oops on not selling!

well i would have had to tax winnings which is always bad and new data seems to support my assessment of the consequences. getting wage growth going is crucial though but imo determined policymakers should be able to do that, especially as exporters should be seeing that they will profit in consequence.

The most important thing the Japanese needs to do is to convince their youth 2d girls and porn are not substitutes for real sex.

http://business.blogs.cnn.com/2011/1...s-bottom-line/

Read this stunning statistic:

"One in four unmarried men and women in their late 30s have never had sex, the survey found."

Probably more shockingly:
"...fully 36% of males aged 16 to 19 surveyed described themselves as “indifferent or averse” towards having sex."

Like, wtf are they doing to their kids to make teenage boys not want sex?

that s kinda disturbing but it goes to show that you can even supress fairly basic instincts in a society. russia in contrast seems to be on a good way to back to sustaining birthrates. i think it is mostly a matter of the right propaganda, in the western world business advertisements are the dominating one though.

back to worrying if the call options would not have been much better. should have bought the dip but had no spare money available.

Tons of hookers and booze in Tokyo. Must be more rural population

Nice addition to the thread after 2 weeks.

At eastern motors, where your jobs your credit. At eastern motors...

I don't think the Japanese can inflate like they claim they are going too. They can't possibly sustain themselves at the higher interest rates that an inflationary environment would entail. At like 200% debt to GDP even a small move in their rates would be almost catastrophic. Seems to me like they blew a bubble that they now can't sustain?

What does everyone else think?

i reiterate my price target of 20000 for the nikkei index!
it is crucial to get upward price spiral going, but im pretty confident it will work.

Convert it to USD (and don't use one of the most stupidly set up indexes in the world). Nikkei is up 32% ytd, and EWJ is up 20% ytd.

Try to guess which one is more important.

well, i think i deserve a place in a hall of fame for this call.

Lol. SPY is up more than EWJ since you started this thread.

what? the product i have bought (http://www.ariva.de/726432/chart) is up 43% (in euro) (around 50% in $) and idk why you just randomly pick the worst performing index. the nikkei is up 45% as well. what were the odds for this or better when i started this thread?
surely well below 5%...

One, the Nikkei is a very silly index. You should already know this as it is not cap weighted. The Nikkei TR is up 28% (not 45%) in US dollars, while the S&P 500 (total return) has been 31%, and that is for the entire year, not just from when you started the thread! TOPIX is a good index, btw.

Two, I picked one that is investible in the United States that I happen to have about 1% of my portfolio in. I could have used ITF (Topix 150). The product you invested is Euro hedged. Quite a bit of your returns are on the bet you inadvertently made against the yen.

Since it seems that you really like making predictions, the probability that you are Nostradamus of stock markets is fairly low.

ISEQ +40% ytd
Easy money.
Who has the balls to bet big on Greece? It has a market CAPE of <3

i have been invested in greece since the end of 2011... picked the stocks poorly though, so "only" up 50%.

we re getting close to the target of 20000 ladies and gentlemen

for more brilliant information:
follow me on twitter: https://twitter.com/Makroint
read my blog: http://makrointelligenz.blogspot.de/

If by "brilliant information" you mean "how to underperform SPY by 40%", then I'd agree. This is the return of your recommendation in USD since posting (yellow line):



And this is the reason - mentioned by multiple posters above critiquing your idea - why this was never a good idea, let alone a great one:



I mean, you made 3/5 of the return of simply buying the US index, at substantial risk, and are claiming victory? This is the opposite of "brilliant".

i did buy the index with currency protection to the euro. if you call out an index with a value of 11000 and set out a goal of 20000 for two years and it comes out at 18800, that is a very good call imo regardless of what other indizes did. if you compare it to something you should at least be objective and take the msci world index or even a balanced portfolio or sth.

also you comment about substantial risk must be a joke right? you claim the spy is a safer investment than the nikkei? you claim going 100% spy would be safer than 80% spy and 20% nikkei? i never recommended to anyone to go 100% long Japan. my approach is safer because it diversifies. the risk of buying the nikkei (or topix i did) at 11000 was extremely low.

Yes it's a good call, but worthless from an investing perspective. And SPY is kind of the benchmark for any trader or hedge fund. If you're badly underperforming SPY (regardless of how good your predictions are), you're below average, not "brilliant". Predictions that don't result in portfolio outperformance are worthless. I predict that oil will hit $100 a barrel again in the next five years (current ~$50). Doesn't mean jack **** unless I can make money from it that beats an index.
Look, people who get predictions right are interesting. But sample size, global conditions, etc mean that you need a lot more than once to mean anything (unless you're taking low probability events).
No, just a bit of fun.

I don't think an approach is safer because it diversified. And there was lots of risk. If the economy failed to kickstart, you were holding an absolute mess because of JPY. You even kind of agree that it depended:

If there was a global recession or problems (necessary for SPY to go down) or they failed to execute, Japan was in strife. Everyone called what Abe was doing "risky". I don't think you gained anything her except underperformance of SPY, to be honest.

Anyway, congrats on the call. It seems you got it correct