With EUR/JPY under 100 for the first time in over 10 years and USD/JPY approaching all time lows, we all realize that it's only a matter of time until the Bank of Japan (BOJ) encourages worldwide intervention as they did on August 4th and October 31st of 2011. Japan relies too heavily on exports to allow their currency to maintain the strength that it's carried through most of 2011. It appears that Japanese exporters were buying up yen like crazy the last two days to close out their annual books in one currency so I would expect that trend to reverse itself this week as the markets re-open after the New Year because these same companies will be too low on dollars and euros.
Regardless of what takes place early in the month of January, I still anticipate the BOJ to intervene some time before January 15th. Look to capitalize on a giant spike similar to what happened on October 31st when the yen lost 400 pips in a matter of minutes.
Buy EUR/JPY and USD/JPY now, maintain tight stops and set some sell orders 300-400 pips higher and look to make a tidy profit quickly. The Bank of Japan has already proven that they will step in as necessary so look at this as only a matter of time.
I sincerely apologize to all who lost money on my EUR rally prediction. I am in the same boat. However, US corporations were all buying dollars at the end of the year so they will be forced out of necessity to reverse that trend early in 2012. So hopefully EUR/USD will hit 1.39 before it touches 1.19 and we the long minority can all jump for joy!
But watch carefully for BOJ intervention and a jump of USD/JPY to 79.15-80.15 and EUR/JPY to 103.00-104.05.
I wish everyone a blessed New Year and say buy, buy, buy USD/JPY as well as EUR/JPY and cut your losses on peaks with EUR/USD.
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