Japanese Yen is the talk of the day so far, in currency circles. Very strong moves right after the open deserve attention. JPY has been gaining ground in an accelerated fashion over last few days. Virtually all of recent good fortunes of the Yen are attributed to comments made by the new Japan’s finance minister. On number of occasions he was quoted as saying that financial authorities are comfortable with strong Yen. He negated possibility of intervention, unless Foreign exchange movements become excessive and abnormal. With USD-JPY used as a proxy, these swings have not been abnormal, in opinion of Finance Minister Hirohisa Fuji. So far.

Few hours after the open, once USD-JPY dropped to about 88.20, new reports emerged, with Mr. Fuji backtracking from his earlier statements.  Now he claims he had never approved of a strong Yen nor that he would leave a yen rise “as it is”. This was followed with comments by Japanese Prime Minister Yukio Hatoyama, who bluntly said that recent yen appreciation had been damaging to small business. Nothing else was said, leaving markets uncertain as to their intentions. Is the Yen too strong now? Are they comfortable with current level as long as it doesn’t get any stronger? Obviously their stance is changing, only to what degree?

Last post, Long term gold-silver chart, has generated surprisingly large interest, mostly because of those charts included there. I feel it is neseccary to point out- again- that they are not meant to be taken seriously, but rather as a  general, visual history of those metals. At any rate, I want ot thank everybody for comments. And no, at this time I do not plan any more trades in gold or silver. This could change, depending on market movements, interesting opportunities might arise. For now I stick to currencies.

Couple of weeks ago I devoted a lot room in this blog to New Zealand Dollar. One of the posts suggested that NZD might running out of steam in its advance. It is possible that a major shift is lowly taking place right now. Smaller time frames are pointing to reversals. One of them is AUD-NZD. I’m interested in buying this cross at 1.2173, with 90 pips objective. Another buy level exists at 1.2080. To be clear, I’m not looking for bottom in the major down trend yet, only shorter time frame move, but this could be beginning of something bigger.

The sharp turn in Yen crosses few hours into the session might be significant. It looks like exhaustion move and combined with commentary from Japan could signal reversal.  Being on a short vacation I didn’t follow market live, so no action. However, I expect to start buying Yen later in the week. Maybe even today before start heading home. More JPY coverage in coming updates.

Mike K.