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Bank of Japan: How Long Before the Yen Weakens?
BOJ can only succeed AFTER completed Elliott wave pattern in the USD/JPY, says EWI's Jim Martens

By Vadim Pokhlebkin
Wed, 06 Oct 2010 12:30:00 ET
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On October 5, Bank of Japan rattled the world's financial markets by lowering interest rates from "almost 0%" to "really 0%."

Global equity markets interpreted the news as bullish. (Although, can't you also argue that if a central bank is desperate enough to offer "free money," something is really wrong with the economy? Bob Prechter is right: Investors interpret news depending on how they feel.)
 
But it was currencies that BOJ was targeting: Specifically, the strength of the yen. Did they succeed? Here at EWI we're all about charts -- so take a look at this chart of the USD/JPY:
 
 
BOJ's previous attempt to stem the yen's strength came on September 15. (We wrote about that.) As the chart shows, the USD/JPY steamrolled right over that intervention attempt. And the October 5 interest rate decision hasn't bucked the trend, either.
 
"The U.S. dollar is testing its lows, levels that previously drew the BOJ into the market. Their intervention failed," -- told subscribers EWI Senior Currency Strategist Jim Martens in an October 6 intraday update.
 

Learn LIVE from Jim Martens at the online forex trading course that starts Oct. 19. Details. 

 
"BOJ would only succeed when the market is already poised to reverse course; only after a completed Elliott wave pattern," continued Jim. And, "...the environment is right for the dollar to bottom."
 
You can find our more now from Jim's Currency Specialty Service.
 
You can also learn LIVE how to apply Elliott wave analysis to forex trading at Jim Martens' online course that starts Oct. 19. Click here for details. 

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