Global Stock Market Is Surging. U.S. / Japan Will Soon Hit 120.

We have always believed that investors have overlooked the danger of Japan, and investors have missed the important market trend brought by Japan again and again.

We believe that China's weak economy may be pushed to a dangerous edge by the sharp depreciation of the Japanese yen, which may repeat the Asian financial crisis in a variety of ways in the 1997.

The yen has fallen to the bottom of the 15 year trend line against the US dollar, which may be the most rigid concern of investors.

Another form of currency war may have been gradually opened.

Before the implementation of QE in Japan, we once said that the sharp depreciation of the Japanese yen could trigger a new round of Asian financial crisis. This may be the Chinese currency.

The downward trend has been broken for 15 years, and the yen / dollar will accelerate downward after a short period of opportunity pullback.

From the current chart, the yen / dollar has fallen below the upward trend line of 15 years, and the yen is expected to descend rapidly, and USD / JPY will soon reach 120.

From my experience in the foreign exchange market for 30 years, as long as the dollar / yen trend starts to start, the exchange rate will rise by 10 or 20 yen in the short term.

Taking into account the sudden easing action taken by the Bank of Japan yesterday, it is enough to prove that the above view is very correct.

For those who have missed the current market, they should not believe that there will be a sharp correction in the exchange rate. The US dollar / yen will surge sharply in the short term.

Albert Edwards reiterated within days that the above chart is

The most rigid charts.

The icon has shown that the Japanese yen has fallen below the US dollar's upward trend line against the US dollar for 15 years and is heading for the 30 year upward trend line after technical adjustment.

We agree with the breakthroughs in technology. The US dollar / yen's upward trend has continued to push up the S & P 500 index.

Although the exchange rate has entered the overbought area, we should ignore this signal.

Edwards said that if my guess is correct, the US dollar / yen will rise sharply near that point.

This will pose a major threat to the global economy, but what is the impact of the sharp rise in the yen on the global economy?

First, we see China.

The real exchange rate will continue to rise, though China's real exchange rate has been relatively high.

If other Asian currencies follow the yen's depreciation, China's exchange rate will face greater challenges, and the appreciation of the renminbi will also bring deflationary pressure.

Second, the sharp depreciation of the yen will continue to import deflation into western countries.

With the depreciation of the yen, the profits of the decentralized countries will continue to decline, which will cause their economies to fall into recession.

The bottom line for Edwards is that if the yen has a long-term trend of breaking up against the US dollar and the euro,

Then, not only will China and the US and European economies become weak, but the German economy will also be hard to get rid of.