Inviting Foreign Speculation
The Japanese Finance Minister, Kiichi Miyazawa, all but
invited currency speculators to short the yen, saying that he was not against a
“natural’ decline in the national currency. A cheaper yen would stimulate
exports and help revive an economy stalled for a decade and facing another
potential bout of negative growth. Recent trade figures show that exports from
Japan have slowed substantially. Meanwhile, record unemployment is hampering
Japanese consumers from exerting a stimulating effect on the domestic
front.Â
The Bank of Japan is feared by currency traders because
it is one of the central banks most effective in manipulating exchange rates — in
the short term. With the Finance Minister, in essence, saying economic policy
now favors a lower yen, a major obstacle has been removed for new lows. The
March yen
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May wheat
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for a second day out of its Turtle Soup Plus One sell setup.Â
Momentum-5
market soybean oil
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down day in the grains. Its gap opening and current hold above a short-term
bullish flag is constructive for a continuation play.Â
I mentioned in yesterday’s “Futures Market Recap” that coffee
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was “showing range compression, rising lows, and a new probe to a
one-month high. Although this contract got sold at the top in the breakout area
in a Turtle Soup sell setup, coffee is at seven-year lows and is showing early
signs it could make a more concerted push to the upside out of its mini head-and-shoulders bottom.” Basis May rallied 1.35 to 67.25 yesterday
and is continuing, up 2% to 68.70 this morning.
