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It's a very interesting pair also and has been in a very nice long-term uptrend this year and also this month. Would consider it a buy definately, however the interest rate difference is far lower (5%-0.25%=4,75%) then NZD/JPY (7.25%-0.25%=7%). But if we would consider the rise in the value, it would be a huge gain. A definite buy.
You are probably correct there Jan about the current interest rate differentials between the afore mentioned currencies (I haven't checked them!!).
But, I was refering to the interest payments you will receive from your broker.
OK, one should reflect the other, but apparently that is not the case (and I have no idea why!!).
Taking fxcm as an example, their interest payments for 1 mini lot long of NzdJpy is $1.23 per day, for GbpJpy it is $2.40 per day.
Sorry for not keeping this thread dedicated solely to Nzd/Jpy!!
I think this is logical, as 1 lot long of NZD/JPY means that you own 100.000 NZD=83*100.000JPY and long for 1 lot GBP is 100.000GBP=232,5*100.000 JPY. Then you calculate the rates (7% for long NZD and 4,75% for long GBP per day (/365). That's where the difference is. 1 lot of NZD is of less value than 1 lot of GBP.
Interest works out to be as much with GBP/JPY because your lot is worth almost 3 times as much as 1 NZD lot. If you bought 3 NZD lots, it would come out in USD to be just a little more than what the USD value of 1 lot of GBP
So, NZD = less equity per lot.
Hope that helps to understand the diff
Surely, GBP/JPY and NZD/JPY bith have pip values of $0.85 per pip (for a US$ account) so how can one be worth less than the other?
Bonus points for an 'Airplane' quote in the response!!
This dip on all the JPY pairs seems like the perfect opportunity to begin watching for a long setup. Though caution obviously should be high considering the talk of as high as .50 bp rate increase in the next couple months by the Japanese. Since I myself have no position in any carry trades, I welcome this dip... I hope for my sake (isnt it always : ) that this dip continues and I will get cheaper prices for my hopefully long hold north.
CHF is being shortened a whole lot as well right now, with rising rates coming (possibly) in Japan, CHF may become near as equal a carry trade with its low 2% currency interest.
I think the most important thing will be the decision on interest rates in Japan. We'll have to wait and see, what will happen. Also the fact is, that NZD and AUD are still very strong against JPY.
Between us, I'm hoping for the YEN to gain against NZD and AUD, so that we get a better long for both.
Haven't looked into the fundamentals a lot lately, so this is just a wish without any firm arguments. But as far as I hear, BoJ should raise rates this month and maybe lay ground for further rate increases. Who knows, we'll have to wait and see, but I'd short at the moment, as the retracement is far from over in my opinion.
Though I have taken advantage of the reversal and plan to hold as long as possible, I couldnt agree more with your statement. Even with a .50 rate raise by Japan, the market will still have no better currency to carry against. With JPY strength better than what we saw last week, it would do good things for those that want to get into pairs long term such as NZD and AUD JPY.
This dip on all the JPY pairs seems like the perfect opportunity to begin watching for a long setup. Though caution obviously should be high considering the talk of as high as .50 bp rate increase in the next couple months by the Japanese. Since I myself have no position in any carry trades, I welcome this dip... I hope for my sake (isnt it always : ) that this dip continues and I will get cheaper prices for my hopefully long hold north.
CHF is being shortened a whole lot as well right now, with rising rates coming (possibly) in Japan, CHF may become near as equal a carry trade with its low 2% currency interest.
The trading rang for today is among the major support @ 64.40 and the key of resistance 66.70.
The general over short term basis is to downside targeting 65.10 as far as area of 64.40 .