Soros Chart Signals BOJ Bond Buying Already Enough to Weaken Yen
- Japan monetary base rises to 96% that of U.S. in dollar terms
- UBS says `hard to imagine' one-way yen strength will continue
in Tokyo, Japan, on Tuesday, July 26, 2011. The dollar fell against the yen to the lowest level since March 17 as U.S. President Barack Obama addressed the nation on the economy.
Photographer: Tomohiro Ohsumi/BloombergJapan’s money supply is close to overtaking that of the U.S. economy and some investors say that signals a weaker yen.
The Bank of Japan’s bond buying has nearly trebled the monetary base in just over three years to more than 386 trillion yen ($3.6 trillion) as of April, a central bank report showed Friday. Base money in dollar terms is at its highest relative to the U.S. since 2006 at 96 percent, despite Japan’s economy being about a quarter the size. Some traders have dubbed the ratio a “Soros Chart,” after billionaire investor George Soros correctly predicted in the 1990s that burgeoning supplies of funds would weaken the yen.