Rising Yen Means Trouble

I would be mindful that a rising Yen is a direct indication of risk coming out of markets.

Regardless of the largest stimulus package known to man, the BOJ cannot hold back the tide – should “risk aversion” set forth.

You see – when massive amount of a funding currency (in this case the Yen) is sold / borrowed and the “cheap money” invested elsewhere (such as Australia with the Aussie’s higher interest rate return) – The Carry Trade is on!

But……when these investments need to be unwound / liquidated in times of investor concern – the funding currency takes a “sunami to the head” – and is completely overrun with currency flooding back.

Watch that Yen here closely as I’m well in profit across the board “long JPY”.