hi
is it always accurate to look at fundamentals?
for example, we all know Japanese has been exporting alot more than importing, yet its currency isn’t going up because BoJ doesn’t want it too (by piling up foreign reserve & investing abroad). This is happening to Chinese Yuan as well.
so, i don’t really know if fundamental analysis works well.
because at the end of the day, it’s the bank that controls it.
ideas?
Do you think the latter part of what you said isn’t fundamental while the import/export stuff is?
Japan gets paid with mostly USD and other currencies on exports. Then they have to convert their profits back to yen. So it’s weird, but makes sense. They like to keep the yen at a certain level and not let it get too high.
Yes, I think what the major banks are doing would be as fundamental as it can get.
so how do we evaluate BoJ’s decision?
we can easily predict the currency by looking at import/export, partner country ecenomy etc… but is it possible to predict what the BoJ is going to do? Do they announce their intensions before taking actions?
We can easily predict, eh? I don’t think you’ll find many folks agreeing with you on that one.
As for the BOJ, in some ways yes and some ways no. Sometimes they jawbone without any real intent to move. Other times they just bomb away without forwarning. And at other times they do exactly what they warned they would do. You almost have to treat it like an option.
In Japan, if you want to do business abroad, you must not use the yen. This keeps the yen weak and gives the rich owners of Toyota a huge business advantage overseas. Toyota executives can travel the world first class using their euros. Lower level Japanese, if they have any savings left after paying for food, fuel and housing, can also buy euros.
THE PRICE CHART IS (ALMOST) ALWAYS ACCURATE.
Data errors or network problems could freeze your charts.
Fundamentally exports are alot bettr than imports. The less imports the less money going out of the country. The banks do control the prices on currency. Fundamentals dont always move do to the first sign of improvement. It usually takes 3 or more positives to significantly move a currency in a different long term trend than before. Fundamentals really are steady over a long trend like say weeks and higher specifically.