- The Swiss franc rallied rather significantly during the trading session on Friday, working out well above the ¥172 level while the Swiss franc itself is rather weak, this pair is a clear demonstration of just how weak the Japanese yen is about to become.
- Quite frankly, during the Bank of Japan meeting, they suggested that they don’t care about the value of the yen.
While that may not be completely true, it might also be the day of meeting that the Japanese finally admitted there’s nothing they can do. After all, the debt situation in Japan is actually worse than the United States and is one of the worst in the world. Because of this, the Japanese cannot afford to pay higher interest rates, and it’s also worth noting that the Bank of Japan is most always the only buyer of Japanese Government Bonds. These JGB markets have been frozen for quite some time, and it looks like they may remain so. After all, nobody is interested in buying a tenure bond that yields 0.1%.
Buying On the Dips
This is a market just like anything else related to yen denominated pairs, you are looking to buy dips in the market as it offers a bit of value. Granted, the candlestick for the day is obviously very bullish but you also need to be very cautious about simply chasing the trade. After all, the market could very well get some type of shock during the weekend, so the lesson you want to do is be long of a market all the way up here. That being said, on the slightest dip I would assume that there will be plenty of buyers trying to get involved, and that’s probably true with all things that and in the symbol “JPY.”
At this point, I suspect that the Swiss franc against the Japanese Yen is going to trade to the ¥175 level, which is an area that would have a certain amount of psychology attached to it as it is a large, round, psychologically significant figure. Nonetheless, this is a market that is still very bullish and therefore I think you get a situation where you hang onto the pair, because you get paid at the end of each day.
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