@BlueHorse88 @robhawcroft ok, so when does the fx market notice? last i checked, algos are still piling in.

@mrstormymonday @robhawcroft October 30.. if the BoJ hikes then no political BS.. pure independent monetary decision.. at the moment I find the Fiscal and Monetary Policy contradictory.. playing a tug of war… with the new crew ..

@BlueHorse88 @robhawcroft @grok explain like I am 5 years old

@Imbalanced_Vata @robhawcroft @grok From ChatGPT 🤣🤣 🍬 The Candy Borrowing Game Your friend Yuki has a big candy jar in Japan. She lets you borrow candies very cheaply — you only have to give her one candy back later for every 100 candies you borrow. You take Yuki’s candies, fly to America, and trade them for

@BlueHorse88 @robhawcroft what I find most interesting, is that we would expect to see some strong yen dynamics on repatriation (as we saw in Aug 2024), but the debasement theme + Takaichi are pushing back against the natural repatriation flow dynamics. VERY interesting moment in time here for JPY

@BlueHorse88 @robhawcroft Looking the same data but drawing a different conclusion. The Japanese still love to invest overseas, including retail with NISA. The expensive hedging cost results in many not hedging. Japan Lifers hedging are at record low with some reporting <20% of the portfolio being FX

@BlueHorse88 @robhawcroft What would be the triggering redline yield in say in say the JP10Y????

@BlueHorse88 @robhawcroft Watch for when that stabilizes. In a us curve flattening and the Nikkei slides The US will flatten all curves and trigger international policy easing

@BlueHorse88 @robhawcroft JPY is getting smoked. Unless BOJ raises or MOF steps in the market will keep selling it.

@BlueHorse88 @robhawcroft 100%

@BlueHorse88 @robhawcroft Agreed

@BlueHorse88 @robhawcroft for years it has been cracking quietly

@BlueHorse88 @robhawcroft Just posted about this myself. We’re at a major pivot point.

@BlueHorse88 @robhawcroft Thanks for sharing good insight and info!

@BlueHorse88 @robhawcroft Agree hedged yield isn’t attractive compared to rising domestic yield from Japanese investors perspective, but xccy basis has been tightening (less expensive to borrow USD), right?

@BlueHorse88 @robhawcroft But why stock market close ATH this week?

@BlueHorse88 @robhawcroft Dollar Yen rallies regardless

@BlueHorse88 @robhawcroft This doesn’t take into account of masa san’s unhedged carry trade bet though, maybe softbank & alibaba have a limitless credit line from boj.

@BlueHorse88 @robhawcroft Spread between the FFR and BOJ rates getting crushed probably aids in the carry trade unwind. Nice post!