JPY crosses

Pretty hard to pick any ‘easy’ trades but risk-off dominant sentiment

Risk off sentiment has definitely been the predominant factor in Asia trade over the last two days. The Nikkei had risen by 80% since early November so I guess its no surprise to see it starting to ease off a bit. If the Nikkei eases, then the Yen crosses should follow, and the AUD/JPY recovery stalled this morning at its 99.50 break-down level; another little sign to take heed of.
I’ve cut my cable long for a gladly-accepted 50 pip loss and I’ve cut 50% of my USD/CHF longs just is case the risk-off trades really pick up steam. I don’t think it’s a good market to have a large position in; stay small and then take advantage of the swings.

  1. So if the Nikkei still eases off it will continue to push the JPY down so a AUD/JPY (sell JPY) would be something to look at in the short? Yes just edging into Forex.

    Cheers

  2. Not quite Steven. Paradoxically, if Nikkei falls then the Yen will rise. Since November when the Abe govt announced its intentions, Nikkei is +80% and Yen has lost 30% against some ccys. Now if Nikkei retraces lower, Yen will probably rise as traders reduce risk trades, and pairs like AUD/JPY will fall (AUD lower, JPY higher). I know its not very logical but thats the FX mkt!

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