Tuesday, April 28, 2009
So now that even Mrs. Watanabe has decided that the road to prosperity is paved with yen shorts, USD/JPY and all its yen-cross buddies have duly turned around and headed south. This will no doubt alarm the equity bods, who tend to shiver when they see the yen strengthen. (Little do they recognize that the currency guys are watching stocks for clues to USD/JPY! It's like something oput of M.C. Escher.)
What's interesting is that despite the yen's strengthening, vols have barely budged- the remain at the bottom of the year's range.
Is this a sign of positioning (every man and his dog owns long-dated upside), a sign of complacency, or a sign (like just about everything else these days) that it ain't so bad and we should all buy stocks?
Inquiring minds want to know...