Is It Time To Sell The Nikkei 225 Index And Buy The Japanese Yen?Nico Omer Jonckheere, 16th September 2015

Japan’s Economic Disaster: Wages adjusted for inflation have sunk to the lowest since at least 1990!

As a result, a record 62% of Japanese households described their livelihoods as “hard” last year in a survey on incomes.

GDP for the world’s third largest economy fell by an annualized 1.2% in the three months ending in June.

Recently both charts [the Yen and the Nikkei] have reversed direction which is the reason that it is timely to

examine what is happening in Japan.

Having stepped in a stunning 76% of days to ensure the market closed green, it appears money is running out for the BoJ having spent 78% of its

allotment as of Sept. 7.

Here are the MOST CROWDED TRADES currently:

Therefore, this might be start of something very ugly.

Foreigners dumped ¥1.43 trillion of Japanese equities in the 3 weeks through Aug. 28, which is the most for any three-week span on record:

The Nikkei 225 found at least near-term support in the region of 17,300 but a sustained move back above 19,000 will be required to signal a return to

demand dominance.

As you can see on the chart below, there has been major carry unwind:

CONCLUSION ► A rate hike in the US and/or hawkish talk from the

Fed could trigger a risk averse reaction in markets.

► Talk of more easing from the BoJ could weigh on the yen, but it seems that until there is action, JPY sellers will wait.