Japanese Yen 2013-16

The Yen has had  a great few years. But all that seems to have come to an abrupt end in the last 6 weeks. Why ? Because we finally have the foundations on which the currency are based questioned by the global mood.

But the question you’ll be asking me is, will this new trend continue?

2013

The answer is, yes, for a while; although it lacks some of the drama associated with movements in other currencies, the questioning of the fundamentals is not unreasonable.We’ve also seen a sudden departure of the currency leadership

 It looks as if there will be some relaxation of the trend over the next couple of months though. And it is important to note that there are some positive stabilisers in place throughout the 4 year period – this is not a currency that will completely collapse- merely have periods of weakness interspersed with periods of volatility and others of relative calm and recovery.

There might be some volatility in April, although this will be only a brief spell, and will be offset by supporting actions or words. Nevertheless there is more to come within the coming year.

The focus by May moves to other countries. However there is still some adjustment at currency leadership level going on. But the value of the Yen looks to be preserved at this time and may even rise.

  July looks more promising for currency movements. We see a return to some of the questioning of fundamentals that started the year. And we also see a rather sudden a dramatic turning point in sentiment. We can expect the resulting gradual decline in the Yen to last for nearly all the remainder of 2013. Only by December will the trend slacken off.

 2014

There are new issues to contend with as 2014 starts. We’d have to look back to late 1984 to see what sort of events might trigger this. It appears to relate to the core value of the country’s net assets. Or possibly to power sources. On the other hand the concerns of 2013 are reducing.

February and March sees almost the last of the dramatic volatility that has accompanied the Yen during the previous year. And in this case it might be externally motivated anyway.

April is the next key turning point with a global re-evaluation of the currency.

The next few months – june/Aug -look positive though– the Yen should rise . Indeed the rise might be overdone at this time.

However there is an offsetting influence by September with the return of the issues that were discussed at the beginning of the year – the sources of wealth and power are subject to some limitation.

The next key time is December, when there might be inflationary trends in place which will undermine the faith in the currency’s value

2015

 

Trade in the currency is suppressed in January 2015

 In February there is a brief return to the volatile conditions of April/May 2014 but this is very quickly mitigated by the next month

The next few months are relatively calm currency wise

 And June/July is a bit of  a mixed bag of events, with no particular trend dominating currency wise.

We have to wait till August for another change in the prevailing sentiment. It seems that the Yen is playing catch up to other economic and political events of the last few months. And it comes in the form of a positive lift for the image of the yen. There is a definite positive trend from now until October or November.

 There is much more going on in the last few months of the year albeit at a more granular trading level, rather than big devaluations or revaluations. Although there  is some suggestion of subdued trading again in these last months., it appears more than offset by the positive effects.

 2016

2016 looks to be a more exciting year for the Yen, with a lot more trade.

February in particular shows both volatility and significant flows of funds involving the currency. This parallels a period of significant change in the Japanese country, so we can expect a focus on the country and currency at this time.  It is a little uncertain which way this will go – but it probably entails a downward valuation.

 There is more stability in the second quarter. However there are still major issues relating to the overall value of the Yen and there are signs of significant speculative activity at this time. But expect fluctuation rather than trends.

 July and August return more to the 1^st quarter’s picture – with a possible weakening again. Once more it is the volume of trade that is notable though.

And the big speculative activity returns in September.

The year ends with one more period of pressure on the Yen’s value. But this time there is unlikely to be any significant decline. There are too many supporting factors. In fact it looks like December will be an especially positive time for the currency.