July 11, 2018, 21:20: Continued dollar buying on dips [From Mr. Rikio Shima's newsletter]
0
The USD/JPY reached the 112 level for the first time since January 10 of this year during New York time. Despite fears of a risk-off environment amid the U.S.-China trade war, the dollar/yen did not fall.
Mr. Shima views the USD/JPY as follows. Please see the newsletter that was distributed last night from the investment newsletter "Shima Rikio's Practical Real Trade" provided by GogoJungle.
The flows from M&A and other activities are supporting the downside. Since there isn’t a large buildup of yen shorts (dollar longs) in advance, the situation in risk-off would simply create new dollar-short positions (which would force buybacks if it doesn’t fall much). The U.S.-Japan interest rate differential is widening to a degree that cannot be ignored, and there is almost no prospect of Japanese rates rising in the near future. With Trump's tax cuts, the U.S. business environment has improved markedly, and funds seem to be flowing from Japan to the U.S. just as a matter of course.
In the near future, this environment will not change.
When there was news coverage, I held a small long USD/JPY position for safety and temporarily exited. However, it has come back. Going forward, it seems buying the dip in USD/JPY would be advantageous.
From “Shima Rikio's Practical Real Trade” by Shima Rikio
Subsequently, Shima reported in a July 12 at 0:27 newsletter that he bought USD/JPY at 111.52 (stop loss at 110.80). (Editorial staff)
USD/JPY, 1-hour chart.
× ![]()
