Thoughts On The Continually Climbing Japanese Yen

From time to time, most recently in the October 25 2010 post titled “Market Overview – Part II:  U.S. Dollar, Japanese Yen & Gold” I have commented upon the Japanese Yen.

Here is what I said then about the Yen, which I still believe to be the case today.  I have also included a chart below updated through yesterday:

Next, onto the Japanese Yen.  Up until 2-3 years ago, it was widely believed and (commented upon) that a rising Yen was a sign of danger.   This belief seems to have diminished; however, the strength of the Yen has not.  Is the rising Yen still a signal of danger in the markets?  I believe that it is.

Here is the daily chart since 2005 as depicted on a LOG scale.  The 50-day M.A. is shown in blue.  As one can see, there has been a continued string of strong uptrends, and the Yen pricing action is increasingly “parabolic” in nature:


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1120.76 as this post is written