Aim to become a full-fledged trader with Nanami Nonaka! Learn FX with Nanamin, Episode 3

Nami Nonaka, a female FX actress, will join forces with FX specialist Yasushi Yamanaka to learn with everyone what is necessary to profit from FX and improve trading results. This time, he will also teach the basics of fundamental analysis.

※This article is a reprint and edit of an article from FX Information Strategy.com August 2019 issue. Please note that the market information written in the text differs from the current market.

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【Table of Contents】Aim to become a legitimate trader with Nanamin: Learn FX with Nanamin

Yasushi Yamanaka profile

Yamanaka, Yasushi. Joined American Bank in 1982, became Vice President in 1989, Proprietary Manager in 1993. Joined Nikko Securities in 1997, became Deputy Manager of the Foreign Exchange Funds Department at Nikko City Trust Bank in 1999. Founded Ascendant Co. in 2002 and serves as director.

Official blog：Ascendant/Yamanaka Yasushi's FX information distribution site
Twitter：https://twitter.com/yasujiy

Nana Nonaka profile

Nonaka, Nanami. Born March 17, 1997. From Fukuoka Prefecture. Active as an FX actress appearing in films, stage productions, and commercials, while also hosting a regular program on Radio Nikkei. Her blog updates daily trading activity.

Official blog：FX Actress Arrives! Serious Real-Time Trading Diary of the Rising Actress Nanamin
Twitter：https://twitter.com/himnas03

Temporal factors in the flow

NonakaLast time, Mr. Yamanaka explained the real demand and options barriers as typical flows, along with short-term speculators. This time, he will explain temporal factors as a representative flow.

YamanakaFirst, regarding temporal factors, one is the factors that occur within a 24-hour period, and the other is the seasonal factors that occur annually (Figure 1). Seasonal factors are quarterly, such as the end of March, end of June, end of September, and year-end. In Japan, profits from each company's overseas branches are brought back in dollars, and those dollars are converted into yen through overseas profit remittance.

At one point, President Trump lowered taxes on foreign companies, right?

NonakaYes, the corporate tax and repatriation of overseas profits tax rates were lowered.

YamanakaAt that time, there was a movement for overseas profits to flow back to the United States, which led to dollar buying. This type of overseas profit remittance also has a significant impact as a fundamental.

Also, note that US Treasuries are the most traded sovereign bonds in the world. In particular, Japanese institutional investors hold a large amount of long-term U.S. Treasuries, 10-year and 30-year bonds, and their interest payments occur on February 15 and August 15 every year. The bonds themselves are held to maturity and rolled over, so the principal is not affected, but the interest amounts are substantial. When that happens, interest income arrives in dollars, and the move to sell dollars for yen happens on those U.S. Treasury interest payment dates. Pension funds holding U.S. Treasuries accumulate billions of dollars in interest alone. The interest can be amazingly large and exerts a big influence on the exchange market.

NonakaFor US Treasuries, should I just be careful on February 15 and August 15?

YamanakaThat's right. Of course, the movement to buy U.S. Treasuries should be watched, but more importantly, you must be careful about the payment dates of these treasuries.