CurrencyShares Japanese Yen Trust (FXY)

marc64 (97.13) Submitted: 6/02/08 3:00 PM : Start Price: $95.56 FXY Score: 27.21

I love this issue because distilled into this one price, over time, we witness the whole story of the direction, and rate of change between the entire aggregated economic activities of two of the three largest economies in the world.

So, this one price captures the relative success or failure of fiscal and monetary policy, trade balances, and fundamental confidence in the currencies and economies. This last reason is why I am watching this issue.

The reason I'm giving it a thumbs up is that I think an array of Asian currencies will eventually have to strengthen because they have been kept artificially low for a very long time.

Once the Asian currencies start upward in earnest, that enhanced buying power will go toward buying whatever these emerging economies can't do for themselves. That stronger currency will be spent either in Europe, USA or Japan.

I'm betting the bulk of that spending stays close to home in Asia, and that the net effect bolsters the Yen's strength.

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