Yen Is Back on Track

Reacting to last week's bout of yen strength, we initiated new yen shorts as indicated in Columnist Conversation early on Friday. A long USD/JPY position simply means that a trader is long the U.S. dollar and short the Japanese yen. In the currency world, every trade pits one currency against another, as that is how their fluctuations are measured. One dollar is always worth one dollar, and one yen is always worth one yen; what we're actually trading is the relationship between the two.

After the meteoric rise of USD/JPY, it was only natural that a sharp selloff would occur, and that selloff has become our buying opportunity. Another way to place this trade would be to short the CurrencyShares Japanese Yen ETF (FXY), or if you prefer to play the pullback via the Nikkei, to simply buy the iShares MSCI Japan Index (EWJ), which has dipped to its 50-day moving average....452 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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