How often do I send you a simple actionable insight? Well, here’s one. We’re going to be light on words and let the charts do the talking. Unlike my usual newsletters you can read this one in two minutes. Happy Easter.
Chart number one. JPY short levels. Funds are extremely short!
Chart number two. Yen against the greenback. It’s at its weakest level in decades. Decades, great Scott! Decades
Now, a quote from the BOJ — extremely strongly worded, and we think this suggests that intervention could be triggered around the ¥152 mark. Here’s the quote:
This week, Japan’s top currency official, Masato Kanda, warned speculators against further attempts to sell off the yen and said “all options” were under consideration by the authorities.
We’ve written about being long yen before — we think a short squeeze is not out of the question — and we’ve been wrong and waited patiently (as has Jonathan Ruffer, whose fund has been extremely long the yen since last year…poor JRuff). At this point we think the trade is even more obvious (don’t send me hate mail if I’m wrong!!!) — short USDJPY, long yen; BOJ is coming to town and they ain’t playing. They’re loading up like Rambo.
