 Yeah I'm a buyer of the yen, but I think it's just in the short term it does look like the market is just ignoring the rates hikes the recent rate hikes and and that's really because it was seen as a bit more of a dovish hype because the Governor governor Ueda governor a Bank of Japan governor he when he Kate when he when they hyped rates He didn't Say anything about forward guidance. So he didn't say alright and well We're gonna continue to you know hike this year and it's gonna be maybe about two more hikes or anything like that He's just hiked once and then that was it so it was seen as a bit of a dovish hike now Typically and again historically when central banks hike they don't do they don't hike You know like a one and done they it's the start of a cycle, right? They normally hike in a cycle so they very rarely ever just hike once so if Central banks are starting to hike then it's a hike in cycle and then they hold and then they cut and then they hold and then They hike and that's really what you know the cycle is if they started to hike which they are the only central bank You should expect at least a few more Hikes to come right so the fact that he didn't say anything is you know, that's one of the The things that's going against the Japanese yen I guess in the short time The other thing as well is known as the carry trade, right and the carry trade is basically where traders can borrow the Lower yielding currency. So for example the yen was in the negative. It's now at 0% Yeah, and basically if you then borrow at 0% which is nothing and you can You know put your money into a higher yielding currency like the dollar for example and the dollar You know is that was it 5.5% something like that? 5% imagine You're literally getting 5.5% the difference between the two Yeah As a return right that's that's just easy money so that you know when the Japanese yen Is seen as basically a funding currency which is basically it puts pressure on the the yen, right? but What we're looking for really if if you have a situation where the bank of Japan are in a hiking cycle, let's say right back up here We're in a hiking cycle and let's say the the dollar starts to be in its cutting cycle Yeah, and we're on this end For the dollar and many other currencies by the way not just the dollar is going to be the euro and every other currency, right? Then that gap between You know that starts to come lower right so 5.5 to 5.25 to 5% and in fact This starts to you know increase right from 0 to 0.25 to 0.5 and the gap between the two Starts to erode right starts to get smaller and smaller and Then the carry trade doesn't look so effective And that's when you're going to likely have the Japanese yen start to increase in value But at the moment although they've increased from you know minus 0.1 percent to To to zero percent it does look like traders are you know still not You know suede to kind of buy the yen just yet until they really start to see data supporting more rate hikes from the bank of Japan and in fact Rate cuts going you know from from from either the dollar or other currencies, right? And so you might see you might look at the dollar yen Right and go all my days like you know, we haven't done anything. It's it's you know It's still going higher and higher and higher. Oh One sec guys One sec. I think the My recording has stopped. I don't know why sorry guys one second one second one second I'm not strange. All right, sorry my desktop Screen recording software just suddenly stopped. I don't know why anyways And I've bloody cleared the thing but the point I'm trying to make is this is the um The yen should really be a buy and it's by now. I think in my book maybe a bit early but Ultimately what you're looking for is I asked what I was talking about. It was the dollar dollar yen, right? So the dollar yen All right, you might see it just basically doing something like this on the dollar yen And it's not going anywhere, etc. Right if you look at it on like a higher time for you like daily but if you look at for example the swiss yen Yeah, you'll see in fact The move is more pronounced to the downside right meaning that the yen is strengthening. Why is that? Why is it that the yen is strengthening against the swiss franc, but not so much against the dollar And this is where we you know It's you're you're trying to figure out which Pairs to trade right and understanding which pairs to trade Um, and it's because the swiss franc and we'll get to the swiss franc in a little bit But the swiss franc managed to cut that's exactly it can they've cut rates, right? They're the first central bank to cut rates Yeah, whereas the dollar is holding rates and it looks like they may hold rates for a bit longer So you've got one central bank that is that is hiked rates One central bank that is cut rates and one central bank that is continuing to hold rates So what you're looking for ultimately is the biggest divergence So you're not looking to if that's the yen hiking rates If that's the dollar and that's the swiss franc the best trade is the dollar swiss or the swiss sorry the swiss yen Right yen swiss that is what you want to look to trade Yep that you're not looking at this Yeah, you're not looking at the dollar yen. You're looking at the swiss yen Because they're cutting they're hiking. That's the bigger divergence. And so Um, when we look at a swiss yen chart and in fact actually before we even get to the swiss yen chart and the uh and the yen currency There was an article which is Which was actually very interesting. So if we go to the the poster in the japanese yen channel And it was the oh Don't know what's going on What is happening with my uh With my software my desktop software Sorry guys one second. Let me just record right, so You've got this article here from bloomberg and what it's saying is ah, do you know what i'm gonna have to just uh use the uh the um Zoom recording so What it's saying is is it says state street and city groups see frank replacing the yen? Yeah for carry trades So that's interesting It says traders are starting to turn to the swiss frank as the top choice for funding carry trades instead of the yen Potentially alleviating pressures on the yen currency So remember i was saying obviously that you know the carry trade is you're borrowing the currency with the lower Interest rate and then you're buying one with a higher interest rate Obviously the smart money is seeing that the that japan is looking to high crates and then the Swiss frank are looking to cut rates So if that's the case then why why use the the yen is the funding currency when in fact The bigger divergence is likely to be the swiss frank All right, and so it takes pressure off of the yen Cells so you can have a read of this anyway Yeah One second so adi says but what currency would be on the other side of the carry as one is looking to cut towards the end of the year so adi I know I know I can't Because I've only got limited time today. I've only got probably about another maybe 45 minutes or so maybe maybe an hour or so The member fundamentals is going to be this is the start of your journey. I know you've only joined right? So believe me this is all in the course and this is all something that you will learn but as I said mentioned previously it's really about understanding Which is the strongest currency and which is the weakest currency and so The way to kind of understand another way to understand that is going to be this yeah, is Let's say we were this is the timeline and this is 25 20 25. Yeah, and this is where we are right now the the This is called like leading and lagging. I guess Wife termed it anyway in terms of interest rates. So We've already seen the swiss franc cut rates. Yeah, and let's say that was in march Right. We've got april May june july august September october november and december right and so These swiss the swiss linds swiss national bank have already cut rates So automatically this is the one that you want to sell. Yeah, this is this automatically becomes a sell Now depending on where you are in the timeline will depend Or why I guess we'll dictate as to what Currencies you should be buying or selling so at the moment the dollar The euro The canadian dollar Uh, and who else is there? Uh, and maybe the I put the I put the pound in there as well and the british pound Are all kind of expected to cut in june And then around august at the moment. I think it's the new zealand dollar and then you've got the australian dollar Yeah, and the only one that's not on here is japanese yen because they're looking to high crates, so they're not you know on this on this On the cutting cycle so The currency the currencies you're looking for or looking towards buying and selling yeah is going to be the the Currency that is first of all cutting sooner versus the currencies that are cutting later Yeah, that's what you're ultimately looking towards and so the best trade at the moment the strongest divergence Currently would be the swiss franc versus the australian dollar Yeah, now this also as well changes with data. So it's not set in stone. So let's say for example I don't know the pound. Yeah the the uk inflation stays Really really high in fact inflation starts to rise yeah The next data comes out Do you think Where are you? Where do you think the pound will likely move in terms of? Um, would they would they hold for longer or cut later or would they cut sooner? Addie What do you think will happen? If inflation rises Yeah, let's say it rises back up to I don't know. What is it now? I don't know. Maybe raise it up to 5% Yeah, what is the central bank likely to do? Is it likely to hold for longer or is it likely to cut sooner? In case of higher inflation. Yeah, let's say for example day inflation data comes out tomorrow Exactly and it holds for longer, right? They hold for longer. So a hold for longer Would do what to the currency would it appreciate the currency or would it devalue the currency? Considering we're talking about the swiss franc as well on the other side, right? So we're looking at pound swiss So if they're holding for longer Yeah, which way should the swiss franc? The pound swiss currency go should it go up? Or should it go down? Or anyone else? I don't know if addie's addie's there. Not too sure. He's uh, or maybe he's thinking about it Yep, ken says to the moon, right does everyone understand why earth and ben Pierre david welcome by the way Oh, okay, you're cutting in now a little bit because they enter now, but you get it. Yeah, that's exactly it So that is ultimately what you're looking towards, right? As long as swiss don't get inflation. Yeah, that's exactly it, right? So if if swiss get inflation Then they're likely to cut less which will likely to probably start to appreciate the currency a little bit but as I said before once Once you're on the cycle typically If you start cutting it's very rare that a currency will just cut once So typically they do start to cut, you know, several times And that is really the beginning of the cycle and that's what everyone's pricing in Yeah, so that's ultimately what we're looking at and this by the way Currencies can move so we were talking about the dollar earlier, right? And we were saying that Inflation is likely to be sticky because of oil You know factory orders are coming in etc etc, right? So all the data at the moment Let's say all the data, but there's a lot of data pointing to Higher inflation or stickier inflation or stubborn inflation Yeah, meaning that it's not coming down as much and the economy doing well, right or doing better than expected So in that environment, you're you're you're seeing the The dollar potentially move later In terms of having to cut later, right, which is then should appreciate the dollar Yeah That's basically what it is. And so whenever data comes out You're always trying to think is that data Or will that data influence the central bank to either Cut rate sooner hold where they are or cut rates later That's what you're looking that's what you're looking towards Yeah, so every data that comes out, that's what you're looking towards