Thursday, September 29, 2005

Good time to Buy Yen

Looks like the time is ripe to switch your dollars into yen if you are going on a Japan trip like me. The yen is trading at 113 yen per dollar. If that Tankan survey is really good then the Yen price may move a few yen stronger. However this other guy thinks:

Alan Ruskin, foreign-exchange analyst with 4Cast, thinks any significant yen gain hinges on factors beyond a rosier near-term economic picture.

Ruskin says the yen needs at least two of these developments to play out before it will gain: acclerated yuan appreciation; Bank of Japan interest-rate tightening; the end of U.S. interest-rate hikes; and the end of so-called carry trades, particularly in emerging markets.

I do like how the Japanese stock market is at 4 year highs though. That is good news for people who own shares in the iShares MSCI Japan Index Fund (EWJ)

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