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Japan: A Couple of Observations

September 30, 2010
Japan appears to have made the same mistake twice now. After demonstrating a willingness to confront China over contested territory, it backed down as China seemed to escalate the issue. In a similar vein, Japan was willing to take on the foreign exchange market by selling JPY2.125 trillion yen (confirmed by the MOF today), which appears to be a r…
Japan: A Couple of Observations Japan: A Couple of Observations Reviewed by Marc Chandler on September 30, 2010 Rating: 5
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Europe, Australia, New Fed Governors Confirmed

September 30, 2010
The euro was already recovering from the bout of profit-taking in Asia that had seen a low recorded just ahead of support pegged at $1.3550, when news that the European banks borrowed considerably less from the ECB than anticipated and this sent the euro to $1.3675. Recall that 225 bln euro refi operations were maturing today.
These included the r…
Europe, Australia, New Fed Governors Confirmed Europe, Australia, New Fed Governors Confirmed Reviewed by Marc Chandler on September 30, 2010 Rating: 5
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FX Overview: Dollar on Backfoot

September 30, 2010
The US dollar remains on its back foot. The main driver remains the contrast between the likely trajectory of Fed policy in contrast to the ECB. Moody’s 1-notch downgrade of Spanish credit rating and news that Anglo-Irish needs another 6.4 bln euros on top of the 22.9 bln already injected, and possibly another 5 bln on top of that (in a stress cas…
FX Overview: Dollar on Backfoot FX Overview:  Dollar on Backfoot Reviewed by Marc Chandler on September 30, 2010 Rating: 5
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CAD-MXN Opportunity

September 29, 2010
The Canadian dollar has under-performed this month. Among the G10 currencies, only sterling (+2.2%) and the yen (+1%) have done worse than the Loonie, which is up about 2.4% against the greenback. In the current environment, with the prospects of QEII in the US, Canada seems markedly better positioned. Since Bernanke's Jackson Hole speech the …
CAD-MXN Opportunity CAD-MXN Opportunity Reviewed by Marc Chandler on September 29, 2010 Rating: 5
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The Dollar: Punishment Now, Reward Later

September 29, 2010
The divergent paths between the ECB on one hand and the Fed, BOE and BOJ on the other hand are very stark. The ECB seems determined to reduce the extraordinary liquidity provisions as they expire at the end of the year. In contrast, the market seems to be acting as if new bond purchases by the Federal Reserve are a done deal. Japan is moving to pr…
The Dollar: Punishment Now, Reward Later The Dollar:  Punishment Now, Reward Later Reviewed by Marc Chandler on September 29, 2010 Rating: 5
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Quick FX Update

September 29, 2010
The US dollar remains soft, but the downside momentum seen in recent days appears to be ebbing as new catalysts are awaited. The dollar’s slide is not over and bounces are expected to be shallow and short-lived. The main catalyst continues to current interest rate differentials and their likely trajectory.
The contrast was underscored yesterday as…
Quick FX Update Quick FX Update Reviewed by Marc Chandler on September 29, 2010 Rating: 5
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Italy Vote of Confidence Tomorrow

September 28, 2010
Belgium does has a caretaker government. It has ben unable to form a government since the June election after the previous government collapsed in April. The Netherlands is also struggling to put a coalition together. Italy comes to the fore tomorrow with a vote of confidence in the Berlusconi government that has been shaken by a split in the cent…
Italy Vote of Confidence Tomorrow Italy Vote of Confidence Tomorrow Reviewed by Marc Chandler on September 28, 2010 Rating: 5
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Consumer Lender Woes in Japan

September 28, 2010
Earlier today, Japan's second largest consumer lender, Takefuji sought legal protection of bankruptcy. The source of its woes, and apparently others in that space, is that the borrowers were overcharged interest.
Japan's regulator says that Japanese consumers were overcharged some JPY4.4 trillion. Takefuji has over a million clients. About…
Consumer Lender Woes in Japan Consumer Lender Woes in Japan Reviewed by Marc Chandler on September 28, 2010 Rating: 5
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Irish Update

September 28, 2010
Irish Prime Minister Cowen is trying to reassure the markets. With European central banks reportedly buying Irish bonds (and having appeared to step up their bond purchases a little in recent weeks), the credit default swap market may offer a cleaner read and there the markets are implying the greater risk so far.
But Cowen says not to worry. Irel…
Irish Update Irish Update Reviewed by Marc Chandler on September 28, 2010 Rating: 5
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