Japan's Hedge Fund Housewives

2011-03-30 09:30 AM EST Last Updated: 2011-03-30 01:32 PM EST

 


This is Etsuko Someya--married for eight years with a young child.



But in forex markets, she's known as Mrs. Watanabe--one of hundred of thousands retail investors in Japan trading currencies.



Many of them are housewives, and they are sophisticated--using technical analysis just like professionals do. Etusuko herself earns 12 thousand U.S. dollars a month from trading.



[Etsuko Someya, Japanese Housewife FX Trader]:

"I will fix a time and will trade only within that timeframe. The other times I will spend doing my chores and playing with my son."



Retail investors are a big factor in currency markets -- they make up almost a third of daily spot yen trading. And many trade on margins.



In fact, they were a key factor in sending the yen to a record on March 17th when they slashed their long positions in dollar/yen.



Meet 'Kimono Trader' Yukiko Ikebe: A mother of three and an investor with 40 years of experience. She's concealing her face because she fears for her life - having made what she says is millions of dollars trading currencies.



On the day the yen hit a record, Yukiko spotted an opportunity in the Aussie-Yen.



[Yukiko Ikebe, Japanese Housewife FX Trader]:

"I started with a short position from 80 yen and it fell all the way to the 74 yen level. I shorted with a difference of 5 yen. The next day, it started to level around 77-70 so I bought back in. Since the short position was a difference of 5 yen, if you had put in 100,000 yen, that would be a profit of 500,000 yen."



As Japan continues to watch the yen, analysts say the activity from retail traders will be crucial.



[Koji Fukaya, Credit Suisse Chief Currency Strategist]:

"The amount of trading volume and interest from retail investors towards currencies and overseas assets will likely grow from here."



And that's especially the case since carry trades are back in vogue as central banks flood the system with liquidity.



Yukiko is now looking at the Aussie and the South African Rand. That's in contrast to a Reuters' poll of analysts that expect both the currencies to weaken over the next 6 months.



Unlike professionals who use complicated models for their forecasts, Yukiko opts for her own strategy.



[Yukiko Ikebe, Japanese Housewife FX Trader]:

"They are one of the few economies in the world that are 200 percent self-sufficient. That's a wonderful thing. So I traveled to both and saw with my own eyes whether I should buy their currencies."



As Japan continues to rebuild from the earthquake, Mrs. Watanabe will not only play a crucial role in currency markets but also as the wives, mothers and citizens of a nation in crisis.

 

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