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6M USD/JPY Seagull Expired With 5% Profit‏

ByDanske Markets
Published 02/18/2013, 12:55 AM
Updated 05/14/2017, 06:45 AM
USD/JPY
0.05%
EUR/JPY
0.01%
NOTE
0.68%
Today at 16:00 CET our 6M 77.00-79.30-84.00 USD/JPY Seagull expired with a profit of 5.03% (spot ref. 93.39). All five strategies recommended in connection with FX Trends: The great policy response to hurt the dollar, 15 August 2012, have now been closed or expired. The strategies produced an average profit of 1.14% with an 80% hit ratio.

Yen depreciation set to continue
In connection with our quarterly FX Trends: The great policy response to hurt the dollar, 15 August 2012, we recommended entering a 6M 77.00-79.30-84.00 USD/JPY Seagull at zero cost to position for a move higher in USD/JPY. We expected Bank of Japan (BoJ) easing to drive the yen weaker but, at the same time, we doubted that we would see a move much above 84 in six months. However, a change in Japanese politics and, not least, a fundamental shift in the monetary policy of the BoJ, which for example, raised its inflation target from 1% to 2%, has paved the way for a remarkable deprecation of the yen over the last six months.

We still think that the fundamental case for a weaker yen remains intact and, even though momentum is likely to slow down near term, we expect more upside in USD/JPY and EUR/JPY to unfold. Note that we are still long USD/JPY in a 6M USD/JPY 80.70/84.00 risk reversal recommended in our FX Top Trades for 2013: How to position for the coming year (5 December 2012).

Recommendations from FX Trends (August 2012) now closed
The 6M USD/JPY seagull strategy was the last strategy to be closed among our recommendations from FX Trends in August 2012. All in all, our five strategies recommended in connection with FX Trends produced an average profit of 1.14% with an 80% hit ratio.

To Read the Entire Report Please Click on the pdf File Below.

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