Information Is Money: Japanese Yen Rally (July 27 2023)
Hello! My dearest reader, for starters, this is one of that my thought about finance. So, be my guest if you wanna stick around. I understand you may not be interested in finance and of course, you're welcome to kiss this post bye. It's midnight my time and though I cherish the serenity of this hour because of the clarity of thoughts I have when all is dead silent, I still do wanna sleep. Oh! let us get to it haha
It is not surprising to say that you must have heard someone say "Information is key". Indeed, I can say without an iota of doubt that information really is key and go further to include that info is money. I have had these words uttered to me countless of times and today, after missing out on a big market opportunity because I wasn't timely enough to get the info, I really had to wait till this hour to flush down these words you're reading.
According to Investopedia, the Nikkei is short for Japan's Nikkei 225 Stock Average, the leading and most-respected index of Japanese stocks. It is a price-weighted index composed of Japan's top 225 blue-chip companies traded on the Tokyo Stock Exchange. The News outlet for Nikkei (Nikkei Asia) reported today that they had learned the Bank of Japan (BOJ) will increase the yield/interest on the Japanese 10-year government bonds to 0.5%. This was enough to send the Japanese Yen rallying across the board. It strengthens against other major currencies. I had been initially bearish on the yen (thinking the yen is going to lose value) beginning of the week. So when Nikkei broke this news, I was a bear on the yen. My positions from the previous day were quickly liquidated at break-even (no profit or loss).
We didn't have any news or data from Japan until around midnight on July 27, 2023. So when I go break-evened, I quickly switched on my economic calendar to make sure there was nothing I was missing out on. It turned out the supposed news that Nikkei had learned was breaking news and not something that was planned in advance. I saw markets go more than 70 points without me. If you factor this in monetary terms, that could net me more than a month's salary had I known the news even 5 minutes after it was reported. If this is not a classic "information is Key" to you, then I guess you and I are on different wavelengths. Like the markets, opportunities will always come so I shut down my computer and went out with my nephew.
Talking about opportunities, later that night, BOJ actually came through saying they will allow flexibility in yield control. Markets took this as the bullish yen and markets that had sold off continued to in that direction. Hey! before that, BOJ said they will allow the yield on their 10Y bonds to alternate around zero by a margin of 0.5% both ways but then said the fixed rate will go to 1%. Hahaha! Are you kidding me, their funding rate has stayed at -10% for as long as my age (I meant to say closer to my age). So allowing a flexible yield control definitely means more ways to the positive section of 0. So I began buying the yen this time. Of course, I was in drawdown for a minute or two but right now, that fish (yen) is too far up that it is singing "I Believe I can fly". So the day ended well as you can guess. Now don't you see that information is money?
I think you do. So have a great weekend as will I and until next time, stay blessed.
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