views of yen /dollar curve

[bryanc]

thinking about bringing an investment in US$ back to japan as the yen is so low against the $..
against that there is a penalty encashing early.. any fews on how long situation will last like this..
presuming it wont get any worse(?) and that it may the time to take advantage of the low yen before it rises again...

any views??

[TBS]

thinking about bringing an investment in US$ back to japan as the yen is so low against the $..
against that there is a penalty encashing early.. any fews on how long situation will last like this..
presuming it wont get any worse(?) and that it may the time to take advantage of the low yen before it rises again...

any views??

What would you do with the yen if you brought it back?

[bryanc]

that would be another post asking for peoples advice!

but my idea was to max out family nisas then put some in a taxable acct and invest in things like the emaxis...

[bryanc]

my thinking is that even if i dont invest it right away or if the investment doesnt increase (or goes down slightly)
would still be better than if the $ went from 135 to 120 yen when i cashed out...

[TBS]

but my idea was to max out family nisas then put some in a taxable acct and invest in things like the emaxis...

Effectively then you'll be converting to yen then converting straight back again when buy emaxis which is mainly/all global equities (depending on the emaxis type).

The costs of doing it will be the early encashing penalty, transaction costs, currency conversion costs, opportunity cost of paying capital gains taxes early, potentially missing out on gains during the time out of the market...

It may make sense if the US$ investment is significantly under-performing emaxis & you can benefit enough from the tax-free status of NISA. It may not if all the above costs handicap the re-starting position too much, or if you'll be able to fill the NISAs anyway without this... You'll have to run the sums to make an informed decision.


Finally, nobody knows which way the F/X rate will go, or if it will move at all. There's lots of noise out there, but it's best just to ignore it. The people who think they know usually find out sooner or later that they don't

[bryanc]

thanks-understood-the current investment is just sitting in cash*ie not invested in anything in the fund so will not change in value

[mighty58]

Finally, nobody knows which way the F/X rate will go, or if it will move at all. There's lots of noise out there, but it's best just to ignore it. The people who think they know usually find out sooner or later that they don't

This is the truth, no matter what opinions are out there. However, if you had been thinking of bringing that money to Japan at some point anyway, you can at least rest assured that now is better than any other point, relatively, in the last five years. Just don't kick yourself if the rate gets worse/better from here on out.

[Roger Van Zant]

Effectively then you'll be converting to yen then converting straight back again when buy emaxis

Eh? I buy eMaxis each month and I use yen. Why would he need to convert back to US$ again if he is investing with a Japanese broker?

[Beaglehound]

Effectively then you'll be converting to yen then converting straight back again when buy emaxis

Eh? I buy eMaxis each month and I use yen. Why would he need to convert back to US$ again if he is investing with a Japanese broker?

He means the underlying assets in a global fund are mostly denominated in foreign currency, a hefty percentage of which will be US dollars. So although you are buying with yen, effectively you are buying foreign assets which are priced in currencies other than yen.

[RetireJapan]

Eh? I buy eMaxis each month and I use yen. Why would he need to convert back to US$ again if he is investing with a Japanese broker?

Generally speaking the currency a fund is denominated in doesn't make any difference: it is the assets within the fund that matter.