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Nikkei - Yen Carry Trade - Real or Cheap Politics ???2nd Week of August felt like we are in midst of Peak Autumn Season - Wherever we turn - Every Tree is turned Fully Red. The Entire World market was brought down to its Knees, given the "EXCUSE" of Japan's Yen Carry Trade assets.bwbx.io Yen carry trade is estimated to be around $20 trillion, according to Deutsche Bank, which is 505% of Japan’s GDP. Other estimates, based on foreign lending data, suggest it is about $1 trillion, while Japanese investors’ net international investment has grown to $3.4 trillion. All these stories are fine - but it was presented to the world by the Cheap Media houses. Multiple news were mixed up (Yen Carry Trade + US Recession + Iran War Escalation). It was being reported that the entire world economy will dive into Recession, Indian Economy would face a Major Correction with some "Brilliant Minds" predicted that Nifty would crash to 11,000 in next 2 years ? Really ??? Even common-sense says these are Non-Sense Here is a Detailed R&D with Step-by-Step explanations unveiling the Evil intentions of Big Players, Media Houses who wanted to take quick advantage of the News to bring the prices down in a Flash Comparison of Nikkei's Weekly Chart vs Daily Chart 1. Nikkei had a clean Cup and Handle Breakout around 33,820 levels in Jan 2024 following which the price blasted nearly 22% in 2 months 2. The Price then faced Multi-year Parallel Channel Resistance on Mar 18th week and started falling and bounced again taking support of Fib 0.5 only - Typically when Fib levels are NOT combined along with previous Support and Resistance - they are susceptible to be broken down again if there is a News based fall 3. By Jul 8, Nikkei tested the price levels of Mar 18 and fell - initiating a Double Top pattern with neckline set at 36,670 and the price was falling Non-stop from July 8 already.... 4. Now comes the News from BOJ on Wednesday Jul 31 that the rates are increased by 0.25%. As I always say, ANY NEWS has the Power to Break one or more Supports (or) Resistances. In this case, the Negative publicity by Big Media caused a -5% fall on Aug 1st (Thu) resulting in Breakdown of Double Top Neckline Key Point to remember is that the Fall was Pre-destined in Mar 18 and then on July 8 technically. The Negative News "JUST" Added "Fuel-to-the-Fire" setting ablaze the entire world market in a flash If there was NO News - still the Breakdown could have happened and if it happened, then the price would slowly come down to the Cup and Handle Breakout zone of 33,820. But the Overhype given my Media + US Recession (another Fictitious Horror Story) + Iran War escalation fears caused the price to Breakdown the 33,820 support level As per Double Top pattern, the price would reach the same place from where it Started the "M" pattern and voila - it came exactly to the same level of 30,404 on Aug 5th reaching a Intra-day low of -12.65%. Despite breaking 3 Support levels on Monday, the price took the next Support and bounced back "Same Day" above 2 of the Supports Remember - Neither BOJ Governor nor Japanese PM/FM did anything to Stop / Reverse the price action on Monday. The calming news from BOJ Deputy Governor that there will be NO further rate hikes came out on Wednesday. But by that time, the price regained above all 3 supports which was broken (reaching above the Cup and Handle BO ZONE) For those who don't believe Technicals didn't save the game - tell me your Story. What caused the reversal from 30,400 zone ? Entire world is driven by Technicals and NEWS can ONLY cause a temporary direction change By Monday - Japanese economy had already touched -30% down in 30 days since Jul 8. Its impossible for a country's economy to crash so fast and still fall below. it would be a Catastrophe and even the Big Players who wanted quick gains know this, but they just wanted to Play a "Cheap Game" capitalizing on the Panic sentiments of Innocent Retailers Understand the True working of Market - Stay Confident - Build your Wealth. Disclaimer: 3+ Years Teaching Experience in Stock Market - Technical Analysis, Behaviour Analysis, Advanced Patterns, Emotional Management, News based Trading... We are NOT SEBI Registered and Our focus is NOT providing Buy/Sell Recommendations/calls. Primary Objective is to provide detailed analysis of how to review a chart, explain multi-timeframe views purely for Educational Purposes. We strongly suggest our followers to "Learn to Ride the Tide irrespective of its Side" *** Important *** Consult your Financial Advisors before taking any positions If you like our detailed analysis, please do rate us with your Likes, Boost and share your comments -Team Stocks-n-Trends
SPREADEX:NIKKEILong
by Stocks-n-Trends
Macro Monday 42 ~ Japan Business Sentiment (ReutersTankanIndex)Macro Monday 42 Japan Reuters Tankan Index – Business Sentiment (Released this Wednesday 17th April 2024) Firstly lets briefly cover the Japan Consumer Sentiment we covered last week, Japan Consumer Sentiment Last week we covered the Japan Consumer Confidence Index (CCI), which provided a great indication of how the Japanese consumer is feeling. The Japan CCI surveys have a reliable 90.6% response rate from c. 8,400 households. The Japan CCI came in at 39.5 for March last week which was the highest reading in 5 years and demonstrates a trending recovery from lows of 28.6 in Nov 2022. Any figure below 50 on the Japan CCI is pessimistic however historically the index has only ever rose above 50 briefly twice. We discussed how this is due to many factors such as the Japanese being conservative and risk averse. To remedy this and help find a threshold, I used the historical average level of 40.86 as an indicator of above average historical consumer sentiment (however still pessimistic). If we break above the 40.86 level in coming months this would be a good signal of improving sentiment, essentially that the Japanese consumer is less pessimistic than on average, however still pessimistic. Japan Business Sentiment This week we are looking at the Japan Reuters Tankan Index (RTI) which is essentially Japan’s Business Sentiment Indicator. Why is Business Sentiment in Japan an important macro-economic metric to observe? 1.Japan’s manufacturing output for 2021 was valued at $1.025 trillion USD, making it one of the world’s largest manufacturers. The country is known for its high-quality production in areas such as automobiles, electronics, and robotics 2.Japan contributes c.7.2% towards the world’s total manufacturing output, showcasing its critical role in the global supply chain and its influence on international trade. 3.Japan makes up 8% of total global GDP, despite having only 1.8% of the world’s population. 4.Japan is the third largest economy in the world after the US and China Now that we understand that Japan is one of the major manufacturing and economic hubs of the world, lets now try to understand how optimistic or pessimistic Japan businesses are feeling at present. The Japan RTI is collated from data from major leading Japanese companies. 200 manufacturers and 200 non-manufactures advise of improving (above 0) or worsening conditions (below 0). For reference the 200 non-manufacturing companies include the likes of services, retail, finance, and real estate. The Chart You will see, as outlined on the chart, that the Japan RTI is made up of 4 sub categories: 1. Business Conditions (current) 2. Business Outlook (future quarter) 3. Large manufacturing outlook 4. Non-manufacturing sector These subcategories can help in understanding the nuances of sentiment in Japan among different sectors and are crucial for a comprehensive analysis of Japan’s business environment. We might cover these individually when the data is released this Wednesday. I am particularly interested in the future quarter business outlook. Reading the chart Above 0 = Business Optimism Below 0 = Business Pessimism 0 = Neutral The Japan RTI Business sentiment is currently above 0, firmly in the optimistic zone at 10. You can see that we have been rejected from the 12 – 13 level three times since 2022 (Aug 2022, Aug 2023 & Dec 2023). If we break above this level it will be the first time in over 2 years that Japan Business sentiment reached this high. Expectations for the coming release this Wednesday are for a reduction to 9. So expectations are low for this weeks release. Japan Consumer Sentiment has risen from a major low that was established in Nov 2022 and has since been on a significant up trend moving from 28.6 to 39.5. Whilst still in the pessimistic zone the consumer index moves closer towards the historical sentiment average of 40.86. The Japan RTI Business Sentiment appears to have followed suit rising from a low in Jan 2023 a few months later and is now reaching for recent highs of 12 (current reading of 10 with 9 anticipated this week) Both the Japan Consumer Sentiment Index and the Japan RFI Business Sentiment Index are trending towards higher optimism (or less pessimism) but have a bit more work to do to offer some confirmatory action. We will look at the Japan Flash Composite PMI next week which is released Tuesday 23rd April 2024. This will help add perspective in the form of manufacturing/services data directly relating to New Orders, Output, Employment, Deliveries and Stock. In between now and then I will update the above Japan RTI Business sentiment index this Wednesday and update you on Japan CPI which is released this Friday also (something to watch out for). We will gradually get familiar the macro-economic data that matters across the globe here on Macro Mondays. Again, all these charts are available on my Tradingview Page and you can go to them at any stage over the next 5 - 10 years press play and you'll get the chart updated with the easy visual guide I provided. I hope its helpful Thanks for coming along. PUKA
ECONOMICS:JPRTI
by PukaCharts