Independent Strategy

BoJ – wrong end of the stick

We owned a long yen position versus some of our Asian EM currency shorts. The BoJ’s switch to a negative interest rate policy derails that. The logic of a yen long as a hedge against the risk of a rapid China devaluation still stands, but from a weaker yen position. Beyond that short-term hedge we are yen bears, with a target of 135 to the US dollar in 12 months.

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