Quote of the day:“One of the lessons of history is that nothing is often a good thing to do and always a clever thing to say.” ~ Will Durant

Good morning. Japan’s intervention to weaken the Yen is today’ hottest topic – USDJPY trading to as high as 79.50 from session lows around 75.50, EURJPY reaching 111.55 from 107, AUDJPY testing offers near 84 a bit earlier today after setting a daily low at 80.70 etc.

AUDJPY

As I pointed out a few days ago, buying the Aussie dollar against the Yen was a better idea than holding USDJPY longs (comparing +12% to +2.4% monthly performance)  or buying it every time a record low was established. While it is trading ‘comfortably’ above 80-82, I remain bullish expecting more upside to be seen.

Australian Dollar vs Japanese Yen Chart Daily 10-31-2011

USDJPY

What’s quite interesting about USDJPY today is that according to Oanda’s retail positions figures, the long-to-short positions ratio dropped from 87% as of Friday (pre intervention) to 69% today (post intervention). I don’t have Friday’s graph but you have to take my word for it. What does it mean? well, I’d say that most retail perma-bulls already exited their trades and I’m pretty sure that most targets have been quite modest, such as 50 pips etc. Now, the question is: is it really worth to keep buying it every single day while waiting for BoJ to intervene? it’s not like they do it every week – it’s only their third intervention in a year. (more…)

- Continue reading: Dollar Recovers on Japan’s Intervention