A bit of forex: the Yen

Usually forex is outside the scope of this blog, but I will comment occasionally since we have many forex traders in Malaysia.  Furthermore, being Friday, not much is happening in Malaysia.  So I want to comment about the Yen.

Probably everybody and his mother is short the Yen at this point.  But One big reason not to be is the Euro.  Probably one of the bigger contrarian trades this year is to long the Yen.  or at least to take off the position.  Why?  After all Japan is still implementing QE, etc.

When everyone is doing it, it becomes the status quo.  What is different then, when the Yen started collapsing ,and now?  One major difference is Europe.  Europe hadn't implemented their QE program then.  Now that they have, the Yen is a lot more appealing than before.

As of the moment, the 10 year bonds from the US are also rising to an all time high due to QE from Europe.  The bear case for the Yen is no longer applicable unless Japan doubles its QE program. From a Yen standpoint Japan's QE program probably won't destroy their currency as badly as many people are anticipating.