Yen Breakdown
We’ve been waiting for the USDJPY to break the important 162-ish level, a level that has been defended numerous times by the Ministry of Finance. This has been on the back burner for a while, but over the next six months the state of the Sovereign Debt Crisis in Japan might become much more front-and-center, as the USDJPY moves quickly to 200/USD and yields on JGBs move higher.
I still say that bond yields in Europe are much too low, and ready for a move higher that takes them to 5.0%.
Honest question: Since the Reagan reset in the early ‘80s, the yen has depreciated, in gold terms, 2% against ‘equilibrium gold’ (10 year moving average) and 4% against spot gold. Is this praiseworthy or contemptible, relatively speaking?