The new Prime Minister of Japan, Shinzo Abe, pledged to pressure the Bank of Japan to engage in unlimited QE. No wonder the Japanese Yen has tumbled 13% since September. This is a huge move for any currency. How much lower can the Yen go?
The Japanese government is planning to unleash another fiscal stimulus to boost the nations shrinking economy. I’ve lost track of the number of financial stimuli, but they are no doubt in the double digits. The next one is expected to be $136 billion.
No wonder investor confidence in the Yen is at an all time low. Small speculators are now holding a record amount of short positions. Thus far this hasn’t prevented Japan’s currency from a continuous slide lower.
Catching a Yen bottom now is like catching the proverbial falling knife and waiting for the first failed bearish low-risk entry before going long is prudent. This video highlights the first bullish signs of life that often provide fertile soil for extended rallies. Investors can get exposure to the Yen via the CurrencyShares Japanese Yen Trust (FXY) currency ETF.
