The Course of Foreign Exchange Markets from Now On: Episode 99 [Tomotaro Tajima]
Tomotaro Tajima Profile
Economic analyst. Alfina NTS president and CEO. Born in Tokyo in 1964. After graduating from Keio University, he switched careers following his time at Mitsubishi UFJ Securities. He analyzes and studies a wide range from finance and overall economy to strategic corporate management, and even to individual asset formation and fund management. He has served as an lecturer at lectures, seminars, and training sessions hosted by private enterprises, financial institutions, newspapers, local governments, and various business associations, and he gives about 150 lectures per year. He has published and contributed comments in numerous print media, including Weekly Modern “The Rules of Net Trading,” Examina “Money Maestro Training Course,” and he is highly regarded as a stock and foreign exchange strategist at many sites. He also writes in the Home Economics section of the Free National Association’s “Basic Knowledge of Contemporary Terms.” He has regular appearances on television (TV Asahi “Yajiuma Plus,” BS Asahi “Sunday Online”) and radio (Mainichi Broadcasting “Keen-chan’s Aisachi Radio”), and currently serves as a regular commentator on Nikkei CNBC “Market Wrap” and Daiwa Securities Information TV “Eco Nom Marche.” His main DVDs include “Very Easy to Understand: Tomotaro Tajima’s FX Introduction” and “Very Easy to Understand: Tomotaro Tajima’s FX Practical Technical Analysis.” His major books include “Asset Reassessment Manual” (Pal Publications), “FX Chart: The Equation of Profit” (Alchemix), “Why Can You Become Asset Rich with FX?” (Text), and many more. His latest book is “Profits Riding the Rising U.S. Economy” (Free National Association).
*This article is a republished and re-edited piece from FX攻略.com July 2018 issue. Please note that the market information described in the text may differ from the current market situation.
The Shelf Life of Political and Geopolitical Risks Is Also Limited
In a monthly magazine serialization like this, covering domestic and international “political topics,” the moment the manuscript is published and reaches readers, the situation can change drastically, which is by no means rare.
In fact, regarding the U.S.–China trade friction discussed in the previous update of this column, through early April it was hotly reported as “China Avoiding Friction with the U.S.” and “U.S.–China Retaliation Showdown,” but after President Xi Jinping announced an openness to market liberalization at the Asia Forum on April 10, market talk disappeared as if nothing happened (though a fundamental solution has not yet been reached).
Similarly, regarding the April 13 U.S. military strikes on Syria, with the weekend (April 14–15) in between, by the following Monday the market had fully absorbed it, leaving only the impression that “leaders of the U.S., U.K., and France demonstrated political performances (especially President Trump).”
Furthermore, on April 20, North Korean Chairman Kim Jong Un announced at the Workers’ Party Central Committee meeting that he would halt nuclear tests and ICBM launches from the 21st, and that the dismantling of the nuclear test site would also be announced—a startling piece of news. Reflecting on last year (2017), markets were much swayed by related news, and there is a bitter memory of the won-dollar and cross-yen being pulled down by risk-off sentiment tied to North Korea.
Thus, political topics tend to be capricious, and the time window in which they are treated as market-moving material is limited (their shelf life). It is essential to think with this in mind, and additionally understand that “when political and geopolitical risks are strongly cautioned by markets, economic fundamentals of each country become less important; but as these risks retreat, there is a tendency to reevaluate past indicators.”
