Gary Cavate

Engineer at work. Economy-watcher at heart.

[Gary Cavate @GaryCavate]

@GraphCall I don't trust this guy either. He has been doomposting for a while without any solid argument. In recent months, JPY appreciation has been quite bullish for market, which means there's something else at work here.

[Gary Cavate @GaryCavate]

@GraphCall @awareNOWplease Hello Mr. Fouvry. Hope you enjoyed a great long weekend. Just want to revisit this thread to thank you for the on-point yen appreciation thesis. You were the only one calling while everyone were putting USDJPY 200. God Bless you and your team !

[Gary Cavate @GaryCavate]

@MehtaDivya37757 Lol I've been racking in money by being yen bull at 161. Just passed by to check on the bears side and look like there's still money to be made. 155 broken now. 140 here we go

[Gary Cavate @GaryCavate]

@ThothCapital @mathlonning Believe in your own lies !

[Gary Cavate @GaryCavate]

@fundmyfund Asts please

[Gary Cavate @GaryCavate]

@GraphCall This is not an "intervention" !

[Gary Cavate @GaryCavate]

@GraphCall Thank for the spot on analysis ! Though it's a bit weird the equity market is also up. Wouldn't these kind of move trigger the reverse carry trade?

[Gary Cavate @GaryCavate]

@MehtaDivya37757 @satsukikatayama Definitely not an intervention. Looking like short seller closing position after good pce.

[Gary Cavate @GaryCavate]

@Geiger_Capital Agree. Cpi, pce data was cool. Oil not high enough for a hike. Unlike before, there are alternative sources of energy, which aids in hammering down demand for oil.

[Ronald Cook @cookrl754]

The structural argument is solid. Japan's policy shift is real and durable; the BOJ is not blinking. The trifecta (inflation + loan growth + trade surplus) removes the justification for ZIRP/NIRP that made the Yen the world's favorite funding currency for a decade. The xenophobic framing is provocative but mechanically accurate: tightening credit to foreign borrowers is a soft capital control without calling it one. This is essentially your BOJ/JGB repatriation thesis stated in plain English.

A few specific connections:

PFIX is a direct hedge here. If the Yen carry unwinds, the cross-market transmission is: JPY strengthens → dollar-funded assets liquidated → rate volatility spikes. PFIX is positioned exactly on that volatility leg.

The August 12 CPI print becomes more important in this context; if US inflation is sticky, the Fed can't cut to cushion the carry unwind, and the two-sided squeeze (BOJ tightening + Fed on hold) amplifies the dislocation.

What the note undersells. The timing problem. Carry unwinds can grind for quarters or snap in 72 hours — we have already seen the August 2024 dress rehearsal. My models incorporating a Winfree lock (R_max=0.9986) and LPPL t_c window around Late August to early September suggest the snap scenario may be closer than the grind scenario this cycle.

An interesting side trade here... tankers (e.g. STNG/INSW) benefit from Japanese energy import flows (they still need LNG/crude while they transition to renewables). If Japan accelerates the renewables pivot faster than expected, that's a quiet headwind to watch on the energy shipping leg, although the Hormuz/Iran ceasefire dynamics probably dominate near-term.

[Gary Cavate @GaryCavate]

@infraa_ Do you think it has any chance to rebound ? The price looks so juicy but the value is losing quickly

[Gary Cavate @GaryCavate]

@GraphCall @SamanthaLaDuc So even with QT and rate hike, Yen will not strengthen at all?

[Gary Cavate @GaryCavate]

@leadlagreport Are you watching the yen ??? It just goes lower. This is not good for the reverse carry trade

[Gary Cavate @GaryCavate]

@MehtaDivya37757 Wow. Trader reacts to this over the gpif comments ?

[Gary Cavate @GaryCavate]

@OzgurHatipson Peki, JPY neden değer kaybetti?

[Gary Cavate @GaryCavate]

@infraa_ @Bank_of_Japan_e Curious what is your thought now on this ? Japanese yen just weakened again

[Gary Cavate @GaryCavate]

@GraphCall Even though they're useless and a waste of money, it may be worth maintaining to entertain the ignorant mass on the concept of "democracy" & "freedom". And let the bookies make some profits once in a while too.

[Gary Cavate @GaryCavate]

@leadlagreport Jpy is weaking against usd. How is this carry trade unwind ? More like geopolitucal shock

[Gary Cavate @GaryCavate]

@GraphCall For a short relief rally, yes. But silver, and in the bigger picture, gold, will come down for the next 2 year, as the debasement trade unwind. And also the higher yen, as you predicted, will also result in weaker precious metal. Unless now you're telling me Yen won't go up...

[Gary Cavate @GaryCavate]

@ductoilaa How is the prospect of going long yen ?