Consider the yen via Currency Shares Japanese Yen Trust (FXY) in 2014. With all of the liquidity that the BOJ had supposedly pumped into the country's economy -- with the U.S. Federal Reserve scaling back on its asset purchases in a modest effort of de facto tightening -- with one of the worst contractions in Japan's GDP in many years -- wouldn't one expect FXY to fall further in value? Instead, it is holding onto modest gains achieved early in the year.
Courtesy of StockCharts.com
Granted, investments from the yen to the dollar to German bunds to gold to U.S. Treasuries have all benefited from "risk-off" demand year-to-date. Blame it on a five-and-a-half-year equity bull market or even profit taking on perceived overvaluation. Heck, express concern about the sheer number of military engagements in geopolitical hot spots around the world.
Yet, it is also possible that the yen's 25% slide has run its course until the BOJ decides to create more electronic money. And if yen short sellers or Japanese equity owners had any sway over bureaucratic decision-making, more yen would be swirling about and benefiting Japanese exporters today.