Immediately after USD/JPY temporarily moved from the 163 range to the 155 range, with the yen appreciating following the coordinated US-Japan intervention, JACK, who has around 40 years of investment experience, offered a practical perspective on selecting stocks in preparation for the next actual intervention.
The Japanese and US governments are said to have carried out their first yen-buying intervention in 28 years, and USD/JPY temporarily moved from the 163 range to the 155 range as the yen appreciated. While the market remains alert to the possibility of another actual intervention, attention is turning to stocks that could benefit from a stronger yen. JACK, a part-time investor, says it is important not to jump at a simple currency theme and that an additional factor is needed. He also indicated that yen-appreciation beneficiary stocks may be bought in the short term, but that the yen’s strength may not continue for long.
He also pointed out that, given the timing of second-quarter earnings announcements and the impact of the summer lull in trading, corporate earnings should be assessed carefully rather than rushing to target price movements. Although there were instances in which financial stocks reacted, as they did 28 years ago, he said whether the rally at that time would continue for long was a separate question.