RetireJapan

Haystack wrote: ↑Sun Apr 24, 2022 10:30 pm
Indeed. I wonder where the confidence comes from in light of the overwhelming evidence indicating how impossibly difficult market timing is.

Market timing is of course possible if you have the expertise, experience, and access to all of the right research and data. See this recent example:

https://finance.yahoo.com/news/billiona ... XMqhzks6Ya



Billionaire investor Bill Ackman loses around $400 million as he dumps entire Netflix stake after just 3 months

Thank you very much for all your replies. Appreciate all the information shared.

The Yen rate finally at least stopped increasing, so hopefully it will be first step towards stabilization.

I have one more question. I have started my iDeco, though do not have an open NISA account yet.

Tsumitate NISA allows to invest only 400,000 JPY, so it would not be relevant, but I`m intrigued with NISA`s 1,200,000 JPY limit since it`s closer to the lump sum I`m thinking to invest.

I know there is dedicated NISA forum, but since the conversation is already ongoing, let me ask here about how much shall I consider using NISA for potentially using the full limit to invest in index funds. What would be merits and demits to this?

MBK wrote: ↑Tue Apr 26, 2022 6:09 am Thank you very much for all your replies. Appreciate all the information shared.

The Yen rate finally at least stopped increasing, so hopefully it will be first step towards stabilization.

I have one more question. I have started my iDeco, though do not have an open NISA account yet.

Tsumitate NISA allows to invest only 400,000 JPY, so it would not be relevant, but I`m intrigued with NISA`s 1,200,000 JPY limit since it`s closer to the lump sum I`m thinking to invest.

I know there is dedicated NISA forum, but since the conversation is already ongoing, let me ask here about how much shall I consider using NISA for potentially using the full limit to invest in index funds. What would be merits and demits to this?

Regular NISA - 1.2M limit 5 years tax free
Tsumitate NISA - 400k limit 20 years tax free

Because of the incredibly long time you can hold onto your funds tax free with Tsumitate, the results are quite close. Regular is better with some rollovers and only if you can fill it up immediately.

So I have it from well a well-placed source that the Ministry of Finance, while admitting they don't know what's going to happen with the JPY/USD rate, believes the possibility of the yen strengthening back to parity with the US dollar is zero, while the possibility of the yen weakening further to 150 is not zero.

mighty58 wrote: ↑Tue Apr 26, 2022 11:16 am So I have it from well a well-placed source that the Ministry of Finance, while admitting they don't know what's going to happen with the JPY/USD rate, believes the possibility of the yen strengthening back to parity with the US dollar is zero, while the possibility of the yen weakening further to 150 is not zero.

If your friend was truly that confident he would be loaded up on FX options!

There are simply too many independent factors that impact global currency.

I think mighty58 was cracking a joke. The probability of 1 USD = 1 JPY (parity) is effectively zero. But the probability of 1 USD = 150 JPY is not zero, since the rate is already about 130. It doesn't mean we should all rush out and buy USD.JPY call options! It just shows the meaningless of such statements.

northSaver wrote: ↑Tue Apr 26, 2022 1:23 pm I think mighty58 was cracking a joke. The probability of 1 USD = 1 JPY (parity) is effectively zero. But the probability of 1 USD = 150 JPY is not zero, since the rate is already about 130. It doesn't mean we should all rush out and buy USD.JPY call options! It just shows the meaningless of such statements.

It is actually true that I heard that today, but you're right, I posted to highlight the fact that nobody really knows what will happen, or the timeframe, and that therefore such statements are so broad that they are ultimately unactionable. The talk in this thread about "waiting for better prices" is, frankly, absurd. You simply don't know when that will be, and "better" all depends on the point in time you choose to compare to. eg. If it does go to 150, which certainly is possible (and as I mentioned those in the know do consider it a greater-than-zero possibility) then 130 today is "cheap". It's all relative. Some people put an irrational amount of belief that things will always revert to the historical mean (and that's not even mentioning we've seen in this thread some random definitions of how long constitutes "historical").

The last time the Yen was weaker than 130.00 per USD was in the 4 month period

26-Dec-2001 to 24-Apr-2002 and it topped out at 134.80 on 25-Jan-2002.

And before that, 9-Dec-1997 to 7-Oct-1998 and it topped out at 146.40 on 12-Aug-1998.

The last time the Yen was weaker than 150.00 per USD was on 13-Aug-1990.

It was 76 just 10 years ago...

Tkydon wrote: ↑Tue Apr 26, 2022 6:13 pm The last time the Yen was weaker than 130.00 per USD was in the 4 month period

26-Dec-2001 to 24-Apr-2002 and it topped out at 134.80 on 25-Jan-2002.

And before that, 9-Dec-1997 to 7-Oct-1998 and it topped out at 146.40 on 12-Aug-1998.

The last time the Yen was weaker than 150.00 per USD was on 13-Aug-1990.

It was 76 just 10 years ago...

What's the takeaway in quoting these currency rates from the past?

Interesting article in Bloomberg today; particularly interesting was the "inflation adjusted effective exchange rate" chart halfway down. Wow.
https://www.bloomberg.com/news/articles ... y-playbook

As a yen earner, it goes without saying I would prefer a strong yen, but for those sitting on the sidelines waiting for it to strengthen before going back in on investments, the question needs to be asked: what level are you waiting for, and how long are you willing to wait for it?