You really can’t look anywhere right now without reading about someone hating the yen.
I hadlunch yesterday with a bunch of old friends/colleagues/acquaintances from the HF/investment/HNW markets. The result was a wide-ranging debate about markets. Everyone wants the yen to weaken (FX folks want to short the yen, equity folks think a weaker yen can let the Nikkei play catch-up).
Morgan Stanley’s big 2013 currency outlook is called: FX Outlook 2013: The Year of JPY Weakness.
There are news reports about how traders are seeing “vindication” in their longtime bearishness.
Pop traders like Dennis Gartman say they are are shorting the yen.
Per the CFTC, traders ahve recently gone net short the yen for the first time since the Spring (chart via SocGen):
Goldman’s Jim O’Neill says he’s been a longtime Yen bull, but has now gone negative:
Anyhow, we may soon see a general election and a return of the LPD, whose probable Prime Minister has told us now 3 times in the last fortnight that he would force the BOJ, if necessary, to pursue a 3% inflation target. This is the sort of thing that many were advising Japan from overseas in the mid to late 90’s when so many people mistakenly lost of lot of money betting against the Yen. Go get all those guys out of retirement as the time has probably come. The outlook for the Yen is highly asymmetric. It could either waffle around, or could decline sharply in coming months. It is, in my opinion, the most interesting macro thing out there. I have been getting more and more negative about the Yen for the past couple of years, and I have, so far, been wrong, but it seems more and more obvious to me, that the moment is here.
It’s really non-stop. Hating the yen — due to expected BOJ easing and a trade deficit — is the currency story of the moment.
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