The elections on Sunday, could very well be a buy the rumor sell the news type of event. The markets have priced in the postive outcome of a dramatic Monteray policy change to further easing. On a technical basis, the USDJPY is the driver of the market, correlation is 1.0 with the NIKKEI 225. so any selloff in the near term will obviously affect the NIKKEI 225. This is however a near term macro + technical correction. IMO the USDJPY will go alot higher, the base case for most Insitiutions are up to 100 in the USDJPY. Who's going to gain on that backdrop? Japanese exporting companies.
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johangradin
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Foreign purchases of Japanese stocks in December was JPY1.54 trillion, the most in about 7.5 years.
An interesting side note is that part of the funding for this has been in part made by selling of Japanese government bonds. That's according to the Ministry of Finance.
Japan is treading such a fine line however, you can't sell of bonds too fast here otherwise yields would go up and funding of the country that is so leveraged could blow up.. For now it's "ok".
Interesting to see what the BoJ meeting has to offer, two weeks left of manic price appreciation.
QuantitativeExhaustion
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That is interesting
QuantitativeExhaustion
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Maybe the BOJ is active in the Nikkei market
johangradin
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That is yet to bee seen. it's an interesting notion! :)
CaliforniaTrader
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Japanese money supply continues to languish at very moderate levels, +2% as always. If monetary policy has indeed changed, you'd never know it from the numbers. The markets Nikkei and Yen) are either ahead of themselves or money supply is about to explode. Or perhaps both.
johangradin
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Agree. Either or, the money supply and central bank action is frontrun so it's hard to tell.
UnknownUnicorn13705
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Personally...I hate trade on Holidays ( I actually don't..just watching). Holidays+Politics+ Christmas +New years+ December+Fistcale Cliff...= Market act like a drunk Russian after 10 bottles of Vodka :)
PS: I actually like the thing that everything going up.... 2013 will be the time, to watch for Shorts call :)
johangradin
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Lol. I try to stay away too. I think 2013 is going to be a interesting and difficult year. Many of the correlations are going to break appart, and new ones will emerge, watching closely. :)
QuantitativeExhaustion
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You think Eur/Usd correlation will break? That is probably the strongest since the market crash
johangradin
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Not necessarily the EUR/USD, since it's such a large portion of the dollar basket. However, let's say for instance the USDJPY with risk on. And especially the AUDJPY with risk on.. I could see AUDJPY go up, with risk off. and vice versa.
An interesting side note is that part of the funding for this has been in part made by selling of Japanese government bonds. That's according to the Ministry of Finance.
Japan is treading such a fine line however, you can't sell of bonds too fast here otherwise yields would go up and funding of the country that is so leveraged could blow up.. For now it's "ok".
Interesting to see what the BoJ meeting has to offer, two weeks left of manic price appreciation.