Amazingly the YEN did not crash like the stockmarkets and its rather poised to make the final move down ( hence rise) to complete the bottom building process. We have entered the fiscal year end as the worst disaster since WW2 stroke Japan and still is with the Nuclear power plants at 2 locations are in serious danger for a meltdown. Repatriation of funds will be very substantial as everybody needs to rebuild and Japan will get a serious injection of funds as the damages can reach easily 200 bil and insurance companies around the world are faced with the biggest payout claims in history very likely and need to buy YEN as well. Hence we have the year end repatriation flow plus the disaster flow coming in over the next weeks. That will create brief an absurd situation of YEN strength for an already struggling country which has to deal with an historic disaster – this is bad by all means since they also rely on nuclear power for 35% of their overall energy consumption this is also a dramatic psychological disaster.
Target for the final move down remains the 78-80 range and we can expect quite a downmove towards 90 level from there as this event will have changed the camouflage game of ever hiding the structural issues of Japan and the reset process brings a chance for the future but will be a big hardship for now and medium term. Besides it also will heat up the global inflation momentum and be a big drag for government bonds around the world soon.