Monday April 17, 2006 - 10:21:42 GMT
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Black Swan Capital - www.blackswantrading.com
If...then...for the yen?
â€śThere are worse things in life than death. Have you ever spent an evening with an insurance salesman?â€ť
FX Trading â€“ Ifâ€¦Thenâ€¦for the yen?
TOKYO, April 17 (Reuters) - Some Federal Reserve officials are not convinced of the need to raise interest rates beyond a widely expected increase at its next policy meeting in May, the Wall Street Journal reported. Greg Ip, the Journal's Fed correspondent who is seen as sometimes reflecting the views of top central bankers, said that while markets have priced in better than 50 percent odds of a rate increase in June, "not all Fed officials are convinced".
Ip cited recent speeches from Fed governors Donald Kohn and Susan Bies as suggesting the Fed is approaching a near-term pause in its run of credit tightening that has boosted the fed funds rate to 4.75 percent from 1 percent since June 2004.
"The increases in Japanese rates are reversing some of these flows, roiling some smaller currencies and markets and contributing to higher U.S. rates. In March Japanese investors sold a net $20 billion in foreign bonds and stocks, up from a net sale of $7 billion a year earlier. The Japanese are by far the largest foreign investors in U.S. Treasury bonds, with holdings valued at $668 billion in January.â€ť (WSJ)
â€ś'As JGB yields rise, there are more opportunities for investors in Japan to invest internally,' says Nasri Toutoungi, managing director at Hartford Investment Management.â€ť (WSJ)
The yen could be due for an â€śadjustment.â€ť
Especially if Hu listens to Bill and his pal Warren when they talk their dollar short position during dinnerâ€¦
Black Swan Capital
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