Nzd/Jpy

exchange rate development is more important than interest:

What if the trade goes against you?
You say if it goes to 67,00 the initial capital is lost, so if that happens at the end of the year, your ROI will be -52%! If it looses even more, you would be broke. On the other hand if it goes in your direction you would win a lot more than 48% of course.

The good news is, that (in my limited experience ) the currency with the lower interest yield is more likely to deprecate. I think in the long term, low interest rates mean more liquidity, higher inflation and ultimately less valuable fiat money.
If that is the case, the only uncertainty would be that the BOJ is coming to its senses and continues to raise the rates.

So you should only do it, if you think that NZDJPY will rise or at least stay were it is. Don't simply bet that the interest gains will outweigh the potential losses.

Leave enough room so that you feel really safe about the trade. If your absolute max drawdown would not cause a margin call, yes this is a great investement.

Also look at such currencies as ZAR/JPY, I believe that is an 8.5% difference or something crazy.

That is exactly it.

With 1,5k EUR, I could afford the currency (if bought at 78,00) to lose 1100 pips with 2 minilots bought. Of course with interest, my position would be getting stronger as interest flows in, which means I could afford a wider span.

In my opinion the ideal buy price would be 74-76, that's why I decided to wait a little longer. I'm hoping it will fall at least a little bit more.

ZAR/JPY from what I can see is about 50% more volatile than NZDJPY, which I would consider a far riskier investment. I don't want to get too greedy.

Greed usually hits you in the face... with a big steel rod.

Even if the position would fall, I am in no hurry to liquidate it. If it goes up, it's even better, but not my primary goal.

Of course, there will probably be an increase in interest rates of BoJ in the following year and maybe a decrease in interest rates of Bank of NZ. But so far it seems ok.

It would be great if anyone knows of any sites (maybe even this one?) that have a log of interest rates. Or I'll just go check it on google.

As for the NZD/JPY rate, I'm pretty sure NZD/JPY will drop to somewhere around 77, if not lower. I'm thinking about buying at around 76 or less (as stated above). We'll have to wait and see - only time will tell.

You just have to love NZD. Didn't drop to 77 or lower, it was near enough luckily, but still it's doing great.

If anyone has any other comments regarding this pair, please share them. It is interesting to see the NZD getting stronger, even tough it's a shared opinion that rates will be rised on JPY to 0,5% and higher next year.

Gotta love the interest rates combined with leverage!

Went in long on the AUD/JPY as well, but I'm more concerned, because it is on a record high, we'll see how long it lasts.

Regards to all

Hi Jan,

Merry Christmas, great thread. I'm in aud/jpy and looking for similar zar/jpy or kiwi/yen.

I understand the concept and think for a newb its a good way to grow our caps before touching other higher risk currencies.

Did you long since nov? if yes, how's it doing? will be great to hear from you.

Your swap should be around your capital by now i guess, kaching!

First, I found this site offering excellent fundamentals on NZD
Second, I built a system around the NZD/JPY. It needs some work. If you trade this pair, please check my system out, hyperlinked on my signature.

First of all I must emphasize that I am still demoing, and it's not real money right now (which is bad at the moment, since I would have made a healthy gain), but there will be opportunities in the next year as well.

I must say, that in the past I made some stupid choices, and tried to get as much out as possible, with no regards, to risk. First I went long 3 lots, when I made over 2500 EUR on the 3 lots (starting capital was 5000 EUR). It was great having the value of NZD increase and getting high interest at the same time. So of course, if we are profiting, why not profit more? So I went and bought 5 more lots of NZD. I figured since I was already 2500 EUR in profit, the profit could cover a potential loss, but was at the same time confident that NZD will still continue to go up.

Well the trade turned against me, but I could afford to wait it out. After about a week, I had a negative balance of cca. 2000 EUR (since 5 lots weighted against the profitable 3 lots heavily). I decided to cut my lossess and closed the trades.

If I would stick it out, I would have a huge profit by now, but if the NZD wouldn't rise again, I would have lost all.

This combined with some other stupid things I did, reduced my account to 1500 EUR.

This is when I decided to start playing by the rules (money management, stops, assess the currency pair, as to what will happen with it in the future, etc.). This is how I decided for the signature that I use right now and in my opinion this is the greatest problem of all - Greed and impatience.

Since 17th of November I have been playing by the rules, and so far I have an account (in open trades) of cca. 2300 EUR, which is already the 48%+ that I have been aiming for. I am also scaling up into trade, therefore also covering for potential loss with the already made profits.

I wonder what will happen with the real money, but I think I learned my lession. Getting rich overnight if not an option, losing it all overnight is. Play your cards right, minimise risk and keep profit is the key. Greed is the killer of us all.

I can't wait to start. And I must say that I love NZD/JPY pair, have done 2 trades on AUD/JPY also, but as I said i'm more concerned about those 2 trades turning against me, but it's covered so far.

Jan,

Have you looked into running the same carry trade on Gbp/Jpy?

IMHO, I think the rollover credits/ interest payments per mini/lot are almost double that of Nzd/Jpy (OK, the trading range is far greater also!!).