It’s ‘risk on’ again, baby !

August 12, 2024 Leave a comment

Last week’s palaver about unwinding Yen trades is old news.

The Yen has nearly swung to the other side of the pendulum.

The study below shows the 13 moments over the past 15 years when the AUD/JPY was trading (coinciding with a couple other metrics) at a weekly RSI reading of 36 or below.

I say ‘nearly swung’, for we are close but not there yet……for another such occurrence.

When they do occur, they bode well for listed equities risk appetite.

The Nasdaq 100 index appears within my study as a comparison.

August 12, 2024

by Rob Zdravevski

rob@karriasset.com.au

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Yen rises 11% against the Aussie

August 4, 2024 Leave a comment

The only thing you are forced to decide is to choose a #currency.

This is applicable when making, settling or holding an investment.

Holding cash is also an investment and many of the ‘truly’ global investors also ponder which (mix of) currency to hold their cash in.

Recently, I have highlighting the extreme weakness at which the #Japanese Yen has been trading at and more specifically, the Australian Dollar’s strength again the Yen (which is a good indicator of investors risk appetite).

Prompts to buy the Yen appeared in my weekly macro extremes publication and in this recent “Bigger Calls” newsletter.

https://mailchi.mp/karriasset/the-bigger-calls-q3-2024

If I chose the worst entry point (over the past 5-7 weeks) to have bought #Yen and sold #AUD, the current return would resemble at least 8% over the past 3 weeks or perhaps 11% if your timing was impeccable.

I think that is a bit more than interest earned in an Australian term deposit?

As a standalone #FX trade with the AUD/JPY trading at 95.40, it is now in the category of “good enough”.

August 4, 2024

by Rob Zdravevski

rob@karriasset.com.au

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AUD/JPY at exteme highs

April 26, 2024 Leave a comment

Its the 4th time in 10 years that the Australian Dollar #AUD has traded a) at a certain percentage above my long term moving average while b) simultaneously registering an overbought weekly reading and also c) trading at stretched standard deviations above its rolling weekly mean……against the Japanese #JPY Yen.

#AUDJPY

I like watching this currency pair as an indicator of risk appetite.

April 26, 2024

by Rob Zdravevski

rob@karriasset.com.au

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Selling British Pounds / Buying Japanese Yen

June 30, 2023 Leave a comment

Sterling versus Yen is stretched and high

This study is a weekly chart which shows the percentage that the GBP/JPY is trading above its 200 week moving average.

It’s trading at 182.90 at the time of writing.

While overbought readings can stay overbought for longer than many expect and currencies do trend wonderfully, be my guest initiating a new long at these prices…..

…..for doing so isn’t the best risk/reward skew that you’ll find in capital markets.

June 30, 2023

by Rob Zdravevski

Karri Asset Advisors

rob@karriasset.com.au

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Selling Euro / Buying Yen

June 30, 2023 Leave a comment

I think that the ‘fat part’ of the Euro advance against the Yen has been seen.

Today’s price is 157.26

Not to be relied on in isolation but this study below shows the percentages which EUR/JPY is trading above its 200 week moving average……and when combined some other studies, it increases the probability of my belief.

Beyond your standard FX trade (currency conversion) this also means European customers and buyers of Japanese parts, components and product should order and pay for their Japanese products ‘tout suite’.

They should be at their cheapest prices seen in the past 3 years, even when considering Japan’s inflation rate of a ‘mere’ 3.2%.

June 30, 2023

by Rob Zdravevski

Karri Asset Advisors

rob@karriaseet.com.au

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A weak Yen queues continued equity strength

June 16, 2023 Leave a comment

When the JPY/AUD is oversold, it bodes well for continuing an equities advance.

Inversely, equities are stifled when JPY/AUD is overbought.

June 16, 2023
by Rob Zdravevski
rob@karriasset.com.au

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Re-visiting the weakness in Yen

October 22, 2022 Leave a comment

This chart shows the percentage that the USD/JPY is trading above its 200 week moving average.

The extension that we are seeing currently is quite a rare moment.

Many of the previous percentage peaks coincided with the currency cross simultaneously touching 2.5 standard deviations above its rolling weekly mean and it registered a weekly Overbought reading.

October 22, 2022

by Rob Zdravevski

Karri Asset Advisors

rob@karriasset.com.au 

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The effect of currencies on income statements

September 12, 2022 Leave a comment

And the corporate effect of what todays earlier currencies post translates to…..

AUD high against Yen, Euro and Sterling

Aussie companies selling products into Europe, the UK and Japan have been seeing weaker receipts, while those selling to U.S. customers or in USD denominated products (commodities) are booking handsome profits on favourable currency differentiation.

Japanese and European assets are considered cheap for holders of Australian Dollars while Americans (and their corporations) may see Australian assets as being ‘on sale.

Expect those respective benefits to wane while these ‘extreme’ currency movements correct and consolidate.

On a side note, the almighty strength of the U.S. Dollar seems to be a surprise……

2 years ago, I wrote this note when I remember reports of the pending death of the U.S. Dollar to be palpable.

Reports of the U.S. Dollar’s death are largely exaggerated

Today, there doesn’t seem to be an opposite case against the bullish prospects of the U.S. Dollar.

September 12, 2022

by Rob Zdravevski

rob@karriasset.com.au

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AUD high against Yen, Euro and Sterling

September 12, 2022 Leave a comment

It is an appropriate and strategic moment for Australian Dollar importers and/or speculators to sell (a tranche of their intended or required) AUD and use it to either buy Euro (EUR), British Pounds (GBP) or Japanese Yen (JPY).

The (multi-timeframe) bullish trend for the AUD (against these currencies) remains intact as they register 5-7 year highs against these crosses.

It’s more perverse that the AUD is weak against the USD….and whilst it finds a floor, a rise in the AUD/USD (DXY is Overbought) will aide a few more percentages for an additional tranche of buying more EUR, GBP or JPY.

September 12, 2022

by Rob Zdravevski

rob@karriasset.com.au

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Looking for peaks in equity markets

August 6, 2022 Leave a comment

In the chart below, the vertical lines show the significance when the Japanese 10 year bond yield is (on a weekly chart) simultaneously Overbought and trading 2.5 standard deviations above its rolling weekly mean.

The S&P 500 then reaches a meaningful, long term peak.

There have been 5 notable moments over the past 15 years.

The most recent peak coincided with my December 28, 2021 newsletter citing the same point.

https://mailchi.mp/karriasset/a-distorted-sp-500-amongst-extreme-peaks.

August 6, 2022

by Rob Zdravevski

rob@karriasset.com.au

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