USDYEN next?

Published on: October 14th, 2017

FX has been on the mind of our contributors as of late and Julian is getting interested in USD/JPY. Find out the Why, What and When.


  • TA
    The A.
    16 October 2017 @ 11:09
    I am not convinced about the fundamental reasons for the JPY to decline in value simply because the fed is tightening. December 2015, the fed raises interest rates. At the beginning of 2016, the BoJ goes negative with its interest rate. Fundamentally the yen should decline. However, the opposite happened. Why would fed tightening now lead to a weaker yen when at the beginning of 2016 the yen increased even when the BoJ went negative? I guess it is because long term yields in the us declined in the first half of 2016. What do you guys think? Thanks
    • TA
      The A.
      16 October 2017 @ 13:46
      It also seems that there was a large long position in the yen at the beginning of 2016. This should have been another reason for the yen to decline, however it didn't happen.
    • GS
      George S.
      30 October 2017 @ 18:53
      Watch Russell Clark interview on RVTV to understand more about how Yen flows work. Above anything else JPY is a risk on/off indicator because of the net external asset position of Japan, which is by far the largest - 2x that of Germany (2nd largest). Given that there is no yield in Japan, during risk on all that JPY spills into the world. When sh*t hits the fan (like at the end of 2015 and start of 2016) the flows go the other way around. JPY is always the best performing fx in strong drawdowns and Japanese equity performs much worse than other developed.
  • PG
    Paul G.
    26 October 2017 @ 00:33
    China seems to increasingly resembling Russia (present - Putin/ Xi) and past (around the Russian default). Is it just me? or have others noted the similarities as well?
  • AD
    Alexander D.
    21 October 2017 @ 08:13
    Is anyone still long GDX or GLD? Looks like a potential breakdown coming soon. Any thoughts on this former trade idea?
    • SR
      Steve R.
      22 October 2017 @ 21:07
      Personally I don't think having a gold position in one form or another is a problem at this stage. If nothing else its a good hedge for any potential Black Swan event. The long term prospects for gold are good, so unless you have an over-sized or over-leveraged position in gold I don't think its anything to be concerned about. I have gold exposure but expect the price to fall in the short term, but I'm not at all worried about it.
  • gg
    gurdeep g.
    14 October 2017 @ 14:37
    How does this fit in with your gold view Julian?
    • dm
      daryl m.
      16 October 2017 @ 08:30
      I agree good question for Julian. Gold should decline as outlined by Steve R. Not sure where Peter Brandt gave his 2018 Q1 - Q2 bottom forecast for gold.
    • WD
      Wim D.
      17 October 2017 @ 12:54
      Agree USDJPY 1,2 could provide us a nice bottom in gold(miners)
  • JV
    Jason V.
    16 October 2017 @ 02:13
    Excellent from start to finish. The insight into the trade construction process (fundamentals, positioning, technicals) is immensely valuable. Presents the trade idea in its full context, which adds weight and conviction to the case. Also, it should be mentioned that Julian's firm, MI2 Partners, has a particular expertise in all things Japan related, which further adds credence to this JPY trade.
  • MM
    Michael M.
    15 October 2017 @ 17:00
    This was written on 10/12/17 and posted here as dated the 10/14/17. The CPI release on 10/13/17 seemed to be an impactful event in that (together with Fed minute scratching of the head) seemed to reduce expectations of inflation which resulted in a Friday fall in Treasury yields (and bund yields which are back to where they were a month ago), the Treasury/Bund yield spread (which is crucial to understanding the DXY movement this year) and specifically relevant here the 0.36% fall in the USD/Yen (which flattens your 15w ema) How does Friday impact this trade?
  • ca
    courage a.
    14 October 2017 @ 11:39
    Random question but does anyone know what it means to receive 1y1y GBP ? I saw that in a research note and have no idea what it means.. Any help would be appreciated
    • RT
      Richard T.
      15 October 2017 @ 08:57
      I wld take that to mean receiving 1 yr GBP interest rate swaps starting in 1 years time. The way to think about this is you are receiving 2 yr fixed rates and paying 1 yr.
  • SR
    Steve R.
    15 October 2017 @ 01:59
    I have already been looking at USDJPY recently with a similar view. I have aligned this also to the potential for Gold to move south again back towards $1200 due to the correlation between USDJPY and Gold. This also ties in with Peter Brandt's view that Gold will bottom sometime in Q1/Q2 2018, which also ties in with Julian's view of events for Q2 2018. So a number of stars seem to be aligning here (at least potentially).
  • DB
    David B.
    14 October 2017 @ 17:42
    Another option is to purchase FXY out of the money puts. As an example, there are over 6000 open contracts for the Jan 18 80’s. Perhaps one of the members with options experience will provide some insights.
  • DB
    David B.
    14 October 2017 @ 17:42
    Another option is to purchase FXY out of the money puts. As an example, there are over 6000 open contracts for the Jan 18 80’s. Perhaps one of the members with options experience will provide some insights.
  • DB
    David B.
    14 October 2017 @ 17:42
    Another option is to purchase FXY out of the money puts. As an example, there are over 6000 open contracts for the Jan 18 80’s. Perhaps one of the members with options experience will provide some insights.
  • CR
    Corey R.
    14 October 2017 @ 16:15
    Thank you Julian. Very informative piece with good rationale and charts. And I appreciate the use and explanation of the P&F charts
  • ca
    courage a.
    14 October 2017 @ 12:25
  • ca
    courage a.
    14 October 2017 @ 12:16
    With my 3 to 12month time horizon it's deffo worth putting thus trade on my watch list.

Mark Yusko

Morgan Creek Capital Management, Co- Founder, CEO, & CIO

Mark Yusko is the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management. He is also the Managing Partner of Morgan Creek Digital Assets.

Morgan Creek Capital Management was founded in 2004 and currently manages close to $2 billion in discretionary and non-discretionary assets. Prior to founding Morgan Creek, Mr. Yusko was CIO and Founder of UNC Management Company (UNCMC), the Endowment investment office for the University of North Carolina at Chapel Hill. Before that, he was Senior Investment Director for the University of Notre Dame Investment Office. Mr. Yusko has been at the forefront of institutional investing throughout his career. An early investor in alternative asset classes at Notre Dame, he brought the Endowment Model of investing to UNC, which contributed to significant performance gains for the Endowment. The Endowment Model is the cornerstone philosophy of Morgan Creek, as is the mandate to Invest in Innovation.

Mr. Yusko is again at the forefront of investing through Morgan Creek Digital Assets, which was formed in 2018. Morgan Creek Digital is an early stage investor in blockchain technology, digital currency and digital assets through the firm’s Venture Capital and Digital Asset Index Fund.

Mr. Yusko received a BA with Honors from the University of Notre Dame and an MBA in Accounting and Finance from the University of Chicago.

Anthony Scaramucci

SkyBridge Capital, Founder & Co-Managing Partner

Prior to founding SkyBridge in 2005, Scaramucci co-founded investment partnership Oscar Capital Management, which was sold to Neuberger Berman, LLC in 2001. Earlier, he was a vice president in Private Wealth Management at Goldman Sachs & Co. In 2016, Scaramucci was ranked #85 in Worth Magazine’sPower 100: The 100 Most Powerful People in Global Finance. In 2011, he received Ernst & Young’s “Entrepreneur of the Year –New York” Award in the Financial Services category. Anthony is amember of the Council on Foreign Relations (CFR), vice chair of the Kennedy Center Corporate Fund Board, a board member of both The Brain Tumor Foundation and Business Executives for National Security (BENS), and a Trustee of the United States Olympic & Paralympic Foundation. He was a member of the New York City Financial Services Advisory Committee from 2007 to 2012. In November 2016, he was named to President-Elect Trump’s 16-person Presidential Transition Team Executive Committee. In June 2017, he wasnamed the Chief Strategy Officer of the EXIM Bank. He served as the White House Communications Director for a period in July 2017. Scaramucci, a native of Long Island, New York, holds a Bachelor of Arts degree in Economics from Tufts University and a Juris Doctor from Harvard Law School.

Michael Saylor

MicroStrategy, Co-Founder

Mr. Saylor is a technologist, entrepreneur, business executive, philanthropist, and best-selling author. He currently serves as Chairman of the Board of Directors and Chief Executive Office of MicroStrategy, Inc. (MSTR). Since co-founding the company at the age of 24, Mr. Saylor has built MicroStrategy into a global leader in business intelligence, mobile software, and cloud-based services. In 2012, he authored The Mobile Wave: How Mobile Intelligence Will Change Everything, which earned a spot on The New York Times Best Sellers list.

Mr. Saylor attended the Massachusetts Institute of Technology, receiving an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology, and Society.

Alex Saunders

Nugget's News, Founder & CEO

Alex Saunders is the founder and CEO of Nugget’s News, a digital media company focused on all things crypto. Alex has been captivated by cryptocurrency since 2012 and in 2017 he began educating globally on the benefits of cryptocurrency and how to safely acquireit. Nugget’s News has been listed as a top-20 podcast by Business Insider, ShapeShift and Lifehacker and has over 120k YouTube subscribers with 9 million total views.Alex is also heavily focused on his cryptocurrency education platform Collective Shift which currently serves over 4,500 members. provides his unique perspectives by utilising his expertise in fundamental analysis, technical analysis and market sentiment. He is working towards his mission of making it easier for everyone to understand the financial world.

James Putra

TradeStation Crypto, Inc., Sr. Director of Product Strategy

James helped launch TradeStation Crypto’s offering which utilizes a true online brokerage model that self-directed investors and traders have come to expect for equities, futures, and foreign currency markets. He is a reputed crypto asset specialist and blockchain thought leader focused on helping people find innovative ways to participate in this space. He is active in the blockchain community with speaking engagements, TV appearances and mentoring. James has over 15 years of experience in the Fintech industry.

Raoul Pal

Real Vision, Co-Founder & CEO

Raoul Pal is the Co-Founder and CEO of Real Vision, the world’s pre-eminent financial media platform, which helps members understand the complex world of finance, business, and the global economy.

Real Vision members also have access to Real Vision Crypto, a cryptocurrency and digital assets video channel watched by over 80,000 people. In addition, Raoul has been publishing Global Macro Investor since January 2005 to provide original, high quality, quantifiable and easily readable research for the global macro investment community hedge funds, family offices, pension funds and sovereign wealth funds. It draws on his considerable 31 years of experience in advising hedge funds and managing a global macro hedge fund. Global Macro Investor has one of the very best, proven track records of any newsletter in the industry, producing extremely positive returns in eight out of the last twelve years.

He retired from managing client money at the age of 36 in 2004 and now lives in the tiny Caribbean island of Little Cayman in the Cayman Islands. Previously he co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul moved to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe. In this role, Raoul established strong relationships with many of the world’s pre-eminent hedge funds, learning from their styles and experiences.

Other stop-off points on the way were NatWest Markets and HSBC, although he began his career by training traders in technical analysis.

Peter McCormack

What Bitcoin Did, Journalist

Peter McCormack is a full time journalist/podcaster covering topics such as Freedom, Human Rights, Censorship and Bitcoin. Peter created and hosts the What Bitcoin Did Podcast, a twice-weekly Bitcoin podcast where he interviews experts in the world of Bitcoin development, privacy, investment and adoption. Launched in November of 2017, the podcast has grown to over 100 episodes with a guest list that is a testament to the diversity of knowledge and opinions that represent the broader Bitcoin community. Expanding his growing list of human interest recordings, documentaries and films Peter has recently launched the Defiance podcast and DefianceTV.

Caitlin Long

Avanti Financial Group, Founder & CEO

22-year Wall Street veteran who has been active in bitcoin and blockchain since 2012. In 2018-20 she led the charge to make her native state of Wyoming an oasis for blockchain companies in the US, where she helped Wyoming enact 20 blockchain-enabling laws. From 2016-18 she jointly spearheaded a blockchain project for delivering market index data to Vanguard as chairman and president of Symbiont, an enterprise blockchain start-up. Caitlin ran Morgan Stanley’s pension solutions business (2007-2016), heldsenior roles at Credit Suisse (1997-2007) and began her career at Salomon Brothers (1994-1997). She is a graduate of Harvard Law School (JD, 1994), the Kennedy School of Government (MPP, 1994) and the University of Wyoming (BA, 1990).

Hunter Horsley

Bitwise Asset Management, CEO

Hunter Horsley is Chief Executive Officer of Bitwise Asset Management. Prior to Bitwise, he was a product manager at Facebook, working on advertiser products including the multibillion-dollar sponsored content ecosystem and ad breaks in videos. Before Facebook, Horlsey was a product manager at Instagram, responsible for multiple advertising products generating several hundred million dollars of revenue. He is a graduate of the Wharton School at the University of Pennsylvania, with a B.S. in economics. Recently, Horsley was named a member of Forbes’ 2019 “30 Under 30” list.

Luke Gromen

Forest For The Trees, Founder & President

Luke Gromen has 25 years of experience in equity research, equity research sales, and as a macro/thematic analyst. He is the founder and president of macro/thematic research firm FFTT, LLC, which he founded in early 2014 to address and leverage the opportunity he saw created by applying what clients and former colleagues consistently described as a “unique ability to connect the dots” during a time when he saw an increasing “silo-ing” of perspectives occurring on Wall Street and in corporate America.

FFTT caters to institutions and sophisticated individuals by aggregating a wide variety of macroeconomic, thematic and sector trends in an unconventional manner to identify investable developing economic bottlenecks for his clients. Prior to founding FFTT, Luke was a founding partner of Cleveland Research Company, where he worked from 2006-14. At CRC, Luke worked in sales and edited CRC’s flagship weekly thematic research summary piece (“Straight from the Source”) for the firm’s clients. Prior to that, Luke was a partner at Midwest Research, where he worked in equity research and sales from 1996-2006. While in sales, Luke was a founding editor of Midwest’s widely-read weekly thematic summary (“Heard in the Midwest”) for the firm’s clients, in which he aggregated and combined proprietary research from Midwest with inputs from other sources.

Luke Gromen holds a BBA in Finance and Accounting from the University of Cincinnati and received his MBA from Case Western Reserve University. He earned the CFA designation in 2003.

Meltem Demirors

CoinShares, Chief Strategy Officer

Meltem Demirors is Chief Strategy Officer of CoinShares, an investment firm that manages billions in assets on behalf of a global investor base, and is a trusted partner to investors and entrepreneurs navigating the digital asset ecosystem. Meltem oversees the firm’s managed strategies group and its New York office and leads corporate development.

Previously, she was part of the founding team of Digital Currency Group. As a veteran investor in the digital currency space, she has invested in over 250 companies in the ecosystem.

Meltem is passionate about education and advocacy, and teaches the Oxford Blockchain Strategy Programme and co-chairs the WEF Cryptocurrency Council.