With a ripping move in the last two weeks, USD/JPY is on the radar again. Any time the yen weakens we hear about the enormous Japanese public debt and their seemingly eternal easing program and how it’s all going to come crashing down. Then there is the almost comical official “reactions” to yen strength. Since the all time high of about 306 in December of 1975, it made a record low of 75.55 in October of 2011. In the 80’s economic boom the exchange rate moved from 260 in early 1985 to 120 in 3 years – a massive appreciation! When Japanese economy, stock market, property prices peaked in 1990 the exchange rate was 160. All that can be seen on the charts below which will naturally exclude anything fundamental about the USD/JPY. Most charts have comments on them and I’m starting from lower timeframes first.
[click on charts to open in new tab]
So whilst everyone can see that the loooong term trend is down for this pair, markets move up and down and we shouldn’t be surprised if this pair goes a lot higher. Doesn’t mean it will even though there is a lot of energy about 85.50 in the shorter term.