Japense Yen

When an economy contracts, as it is doing in Japan, capital flows from abroad to home. It is this concentration of capital that is causing the Yen and export prices to rise. The flow of capital from aboard to home only reinforces this cycle.

Clearly the Yen has been rising since 2007 and should continue to do so until this self propagating cycle terminates.

Leverage money flows continue fade the rally and decline extremes. These setups have provide excellent entry and exit points since 2007. I expect connected money flows will soon setup or reposition for a break of the 12/09 PDT. This trend line break should setup the break of the 2008 highs.

Yen and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest: