The US Credit Rating Firm, Moody's downgraded Japanese government bond ratings from Aa3 to Aa2. While this is no big shock to the market the way the downgrading of US debt was, it's significant because it indicates that things are changing globally.
What could this mean for the Yen Trade?
RE: EURO/JPY, USD/JPY
Japan METI: Large manufacturers forecast fiscal year-end JPY levels -
Forecasts USD to average ¥81.10 and EUR to average at ¥112.70 this year –
More than 30% of respondents expect over 20% profit decline if USD/JPY stays near the ¥76 level.
More than 60% favor sustained currency market intervention.
This means this is a very tricky trade.
Tight stops are required if you are in JPY cash, or FXY.