Akankah US JPY Akan Melonjak Lebih Tinggi Lagi?

Written by Denny   // February 21, 2013   // Comments Off

“A crisis in Japan would most likely manifest as a collapse of confidence in the yen: At some point, Japanese citizens will decide that saving in any yen-denominated asset is not worth the risk. Then interest rates will rise; the capital position of banks, insurance companies, and pension funds will worsen (because they all hold long-maturing bonds, which fall in value when rates rise); and fears of insolvency will surface. Japan has some buffers against calamity – particularly, its assets held outside the country (including more than $1 trillion in foreign-exchange reserves) and its unmatched ability to export. Nevertheless, the real value of the roughly $14 trillion in government bonds will fall significantly once people fully realize that the tax base is aging and shrinking. Presumably, the yen will also depreciate, perhaps sharply.”

-Peter Boone and Simon Johnson

JP1

Rasio hutang pemerintah Jepang terhadap PDBnya kini sudah mencapai 230%, dan setiap setahun mengalami peningkatan pertumbuhan hutang sebesar 10%. Bahkan, pemerintahnya masih juga akan meminjam hampir 45% dari total anggarannya tahun ini. Jadi apakah itu semua merupakan tanda-tanda yang kian jelas akan datangnya bencana?

Oleh karena itu maka Jepang siap untuk bergabung dalam “perang mata uang” dunia karena pihaknya juga sedang mengatasi tiga krisis yakni ekspor, resesi dan penguatan yen yang menekan ekonominya. Penguatan yen datang dari arus dana ke aset-aset safe-haven selama terjadi kemerosotan dan tekanan ekonomi global, yang berasal peran Jepang yang beragam sebagai kreditur terkemuka dunia dengan nilai aktiva bersih sebesar $3 triliun.

Namun demikian, pergerakan yen belakangan ini nampaknya mulai semakin cepat karena membuka kesadaran bahwa penguatan mata uang Jepang akan memperburuk perekonomiannya yang banyak memperoleh kontribusi dari ekspornya.

John Mauldin, editor populer pada e-letter: Thoughts from the Frontline, yang dalam sepekan bisa meraih 1,5 juta pembaca, belum lama ini menyimpulkan soal ekonomi Jepang dalam laporannya yang berjudul in Forecast 2013: Unsustainability and Transitiondan memberikan proyeksi tegas mengenai seberapa jauh yen akan melemah kembali atas dolar AS:

The Year of the Windshield

Back in late November and December I commented in several radio and TV interviews that the title for my annual forecast issue would be “The Year of the Windshield.” I changed the actual title only recently as I thought more about the upcoming year in its totality, but perhaps the most dramatic shift this year will be that Japan at last begins its descent into that dark night, from the twilight that has been its economy for 20 years. The subtitle comes from my book Endgame, where I whimsically titled a chapter “Japan Is a Bug in Search of a Windshield.”

The problems, which we will look at briefly in a few paragraphs, are well known. Yet Japan has soldiered on, borrowing yet more massive amounts of money, never bringing its budget into line, spending huge amounts on stimulus and infrastructure, and muddling through with an economy that is no bigger today than it was 20 years ago. Japan?s stock market is still down some 75% (give or take) over the last 23 years, though some were celebrating a 23% move last year. Given the frustration that investors have endured from the Nikkei over that time, I suppose you take solace when and where you can. The chart below is current as of this week. You can get more details on the index performance over the last two decades at http://www.forecast-chart.com/historical-nikkei-225.html.

JP2

Japan now has a breathtaking 230% ratio of government debt to GDP (the last estimate I have seen), and it is growing at 10%-plus a year. The government will borrow almost 45% of its budget this year. Has there ever been a more clear disaster in the making? Yet shorting the Japanese bond has been called “the widow-maker.” I think it was Soros who once quipped that you can’t call yourself a global macro trader until you have lost money shorting JGBs (Japanese government bonds).

The new Japanese government, led by Prime Minister Abe and former Prime Minister and now Minister of Finance Aso, has very explicitly demanded that the Bank of Japan target 2% inflation. They have made clear their intention to replace the governors of the current BoJ board with members who agree with this policy. They have the political clout to do so. Whether at the upcoming meeting or after April, when a new head of the BoJ is appointed, that is going to happen. These moves mean there will be a massive printing of yen. In response, the yen has already weakened by over 10%.

You can control the quantity of money or the price of money but not both. (Yes, I know that one influences the other, but I am referring here to large-scale printing of money.) One has to assume that the law of gravity will not be repealed and that investors will want something more than 2% on the ten-year bond if inflation is at 2%. If the ten-year bond were to rise by 2%, Japan would soon be spending over 50% of its tax revenues on the interest carry alone. I submit that this is not a workable business model.

Why now and not sometime during the past ten years? I see a number of factors coming together this year:

  1. The Japanese had a 15%+ savings rate in 1990. That is now down below 1%. (Exact numbers are difficult, because Japanese data on this topic has severe lags, and thus my number is an extrapolation but a reasonable one, I think.) Due to the nature of their retirement system, they have channeled the vast bulk of these savings into JGBs. When the savings rate goes negative or is no longer sufficient to buy all the issued debt, the choice will be to monetize the debt or cut spending. The latter choice does not appear to be part of their national conversation. Cutting spending by the amount required will mean a serious recession and further deflation, an option the new government explicitly rejects.
  2. Both the trade deficit and the current account have recently turned negative. The vaunted Japanese export machine seems to have hit a wall, and this will limit options in controlling the price of the yen, even if the government wants to. Understand, inflation targeting is also currency-valuation targeting. They clearly want the yen to devalue. I have been writing for years that the yen would eventually be 125, then 150, then 200 to the dollar. It has been 300 in my lifetime, and unless the Japanese change direction, there is no reason it can’t get there again. This means that Mrs. Watanabe will see her energy bills double. This will call into question the Japanese decision to close their nuclear energy plants – something that Abe is already reconsidering.

Think the Koreans will be happy when you can buy a Lexus cheaper than you can buy a Kia? (Disclosure: I love my Japanese Infiniti, the first “foreign” car I have bought, except for a two-month dalliance with a disaster of a Volkswagen 30 years ago.) Think Samsung and LG will be happy when Panasonic and Sony can eat their lunch pricewise? Welcome to the era of real currency wars.

Today this note is worth about $11. In the future? Not so much.

JP3

Godzilla Redux: Disaster A or Disaster B

Japan is now committed to either Disaster A or Disaster B. Remember those really bad Japanese “horror” movies of the ’50s and ’60s? Godzilla first released in 1954, and there were dozens of remakes and follow-on movies. It seemed endless. And while the current government policy will not trash downtown Tokyo, it will seriously damage the savings and buying power of two generations. Disaster A is monetization, which is clearly not good when the Japanese want to buy anything not made in Japan (like energy, steel, commodities, a lot of food, etc.) Disaster B is the deflationary depression that budget balancing will yield. Which leads us to the next factor:

3. Once the government is committed to the new strategy, any retreat will cause a market upheaval. This is not a short-term commitment. It seems to me that the Japanese truly believe that their lack of economic growth can be solved through inflation. Their politicians seem to be channeling their inner Paul Krugman, or at the least taking Bernanke’s advice from 2000, when he published a paper called “Japan’s Slump: A Case of Self-Induced Paralysis?”

When your debt and deficit are as massive as Japan’s, the only way to resolve the issue is to inflate away the debt or willingly enter into a depression. They obviously think they can control both the debt and inflation.

This means you should NOT run out and short Japanese government bonds. Repeat, NOT. The only way for the Japanese to make their plan work without having to battle the Godzilla of a destitute bond market is for the BoJ to move out the yield curve and monetize the debt. They will eventually hit all bids on JGBs. For all intents and purposes, the BoJ will become the yen bond market. You will get all the yen they promised when you bought those bonds … but the contract never stipulates what those yen will actually buy.

The plan is evidently that, with a little inflation, they will jump-start the economy; and with growth they can eventually balance the budget and return to a normal bond market. Rots of ruck, guys.

What Do the Charts Say?

Adam O’Dell, yang bekerja sebagai seorang Prop Trader pada sebuah perusahaan Forex spot dan saat ini menjabat sebagai seorang Investment Editor pada Survive & Prosper, belakangan ini menulis dalam laporan yang berjudul “Stay off the Yen Bandwagon, yang berisi ringkasan mengenai pelemahan yen yang cukup tajam terhadap dollar AS – dari 76 Yen ke 94 Yen – dan jawaban pertanyaan mengenai apakah saat ini merupakan waktu yang pas untuk menjual yen:

“… I have to warn you” today is NOT the day to jump on the bandwagon. Let me explain…

This chart of the USD/JPY shows we’ve hit our “first target.” Don’t be surprised to see this uptrend continue, but right now there’s a good chance we’ll see a pullback first.

JP4 I know this for two reasons…

First, 94 Yen is a 38.2% Fibonacci retracement… and that’s the first place to expect a pullback in the current trend.

Second, when the USD/JPY chart bottomed it showed a widely-recognized inverse head-and-shoulders pattern. Once the “neckline” of the pattern was broken, the USD/JPY moved strongly higher.

This pattern is very useful because it allows you to set a price target. After doing the calculations I realized the price target dictated by the inverse head-and-shoulders pattern is the same as the price target shown by the 38.2% Fibonacci retracement (about 94 Yen).

That means we have double “confirmation” of a potential price resistance level, suggesting the current advance in the USD/JPY may stall out.

Don’t get me wrong… the yen will continue to weaken over the long haul. And you’ll have plenty of opportunity to jump on the bandwagon as it continues on down the hill. But if you’re just getting tuned in to this trade… you’re better off waiting to join us.

Wait until USD/JPY is firmly above 95 Yen, confirming its strength. Or be patient for a pullback to 90 Yen so you can get in at a better price.”

Penjelasan terbaik yang saya baca sejauh ini mengenai USDJPY adalah Tyler Durden dari www.zerohedge.com, yang dengan mantap menegaskan bahwa USDJPY TIDAK akan naik begitu saja sekaligus:

Presenting Abe’s ‘Super-Secret’ Devaluation Plan – Double-Down

Much has been made of newly appointed uber-easer Abe’s plans to weaken the JPY by any means possible. Since the global financial crisis began in early 2008, USDJPY has tracked remarkably closely with the ratio of Federal Reserve assets to Bank of Japan assets – as the currency wars escalated. Assuming the Fed proceeds with its planned QE3/4 $1tn expansion, then BoJ assets would need to expand by around JPY100tn to meet this target. The current BoJ holdings of JGBs just crossed JPY100tn – so this new printing is double the current holdings and considerably more than double the planned JPY44tn purchases for the year. Good luck with that given the expected JGB issuance this year is only around JPY44tn and good luck persuading anyone that the BoJ is not directly funding the government in the ultimate reach around. As the Fed monetizes 1 year of Treasury issuance so the BoJ has to monetize over 2 years of JGB issuance – sustainable?

The current collapse in USDJPY to 86 has actually recoupled with the ratio at around 0.0184x (Fed 2.92tn / BoJ 157.833tn). This implies the market is priced for around JPY56tn of JPY printing already (25% more than planned); but, given the USDJPY target of 90 that has been implicitly discussed, this would mean the ratio of Fed/BoJ would need to drop to 0.0165x.

The recent drop in USDJPY has recoupled with the current Fed/BoJ ratio once again…

JP5

but given the Fed’s grand QE3/4 plan, the BoJ will have to be very aggressive to weaken the JPY – obviously – though monetizing double the planned JGB issuance this year seems like a stretch for even Abe (if he hopes to maintain any semblance of market confidence).

Chart: Bloomberg

Kesimpulan: Secara teknikal USDJPY sudah overbought saat ini dan kemungkinan sedang dalam proses menyelesaikan wave ke-3. Jika Anda ada yang mengalami ketertinggalan memanfaatkan rebound tajam USDJPY sejak akhir tahun lalu, jangan bersedih dan carilah kesempatan lagi untuk mengejarnya.

Demikian halnya dengan Global Market Perspective dari Elliott Wave International edisi tanggal 08 Februari 2013, yang meyakini bahwa akan ada konsolidasi sehat dalam jangka pendek: “The surge is a likely third wave, and now that the trend is obvious, a surprising disappointment – the classic description of a fourth wave – is due. Wave four should end above 84.185 before USDJPY continues higher toward intermediate targets in the 124.16 to 147.62 area.”

Jadi bersabarlah dan biarkan pasar menghampiri Anda …

Seperti biasa agar selalu berakhir ceria, berikut adalah 3 gambar lucu dari William Banzai terkait dengan krisis di Jepang:

JP6

Abe is a man on a mission
Japan’s in an awkward position
They can’t seem to grow
So Abe will print dough
As suicide is their tradition

The Limerick King

JP7

Abe is loaded with ink
His country is starting to shrink
He needs some inflation
To prop-up his nation
This war will see all nations sink

The Limerick King

Dan Menteri Keuangan Taro Aso menjelaskan Abenomics sebagai berikut…

JP8

Sumber: nicoomer.blog.kontan.co.id


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