David Hay — Haymaker Daily: Still No Yen for the Yen — yen bull reiterated at 162/USD, a record ~50% undervaluation (Vincent Deluard); BOJ intervening + rate-hike pressure + possible coordinated (US-inclusive) support; framed as a market-turmoil hedge / cash alternative with 10–15% near-term upside and no income (Jul 9 2026)

One-line take: A macro/FX-only Daily reiterating Haymaker's long-standing (and, it admits, so-far-unrewarding) bullish call on the Japanese yen. At 162 yen to the dollar the currency is "in danger of breaking out to a new high, which would actually be a new low," but the Bank of Japan has aggressively intervened around this level, and the undervaluation is "becoming historic": per Vincent Deluard, the yen's ~50% discount to the USD is "the greatest on record," driven by the US rate advantage that makes it "cheap to borrow in yen and invest at higher rates overseas" (the carry trade) — and it still looks "dirt-cheap" even after adjusting for the US-vs-Japan yield gap. Persistent weakness emboldens the carry crowd, but "that's a dangerous game to keep playing" with the BOJ under pressure to keep hiking rates and the "very real potential" for coordinated support that includes the U.S. (a Trump administration "clearly unhappy" with the yen's trade-boosting cheapness). The important caveat: the yen "functions best as a hedge against market turmoil or as an alternative to holding U.S. cash equivalents or Treasury bonds"; "a big move on a near-term basis would be 10% to 15%," it lacks stock-like upside, and a long yen position "generates no income." No security is named (no ETF/ticker), so this is logged as a macro/FX viewpoint, not a stock idea.

1. Key points

The setup — 162/USD, a level where the BOJ keeps intervening

"It now takes 162 yen to buy one dollar." On the five-year chart the yen "is in danger of breaking out to a new high, which would actually be a new low" — "concerning for yen bulls… like us."
The Bank of Japan "has aggressively intervened around this level to prevent further depreciation" against the USD.

The valuation — a record ~50% undervaluation (Vincent Deluard)

Its undervaluation "is also becoming historic." Per Team-Haymaker friend Vincent Deluard, the yen's "nearly 50% discount to the U.S. dollar is the greatest on record."
The primary cause is the US rate advantage: higher US rates make it "cheap to borrow in yen and invest at higher rates overseas, and not just in America" (the carry trade). Crucially, even after adjusting for the superior US-vs-Japan yields, "the yen still looks like dirt-cheap."

The track record — one payday, and it was violent

The positive yen positioning "has given us just one chance to harvest meaningful gains" — "nearly two years ago when it suddenly erupted, triggering severe, albeit brief, carnage in global financial markets" (the 2024 carry-trade unwind).

The catalysts — a "dangerous game," BOJ hikes, and possible coordinated support

Persistent weakness "is undoubtedly emboldening those who effectively bet against it by exploiting the interest differential" — but "with a currency this undervalued… that's a dangerous game to keep playing."
Two pressure points: the BOJ "is under pressure to continue boosting rates," and there's "the very real potential for coordinated support of the yen that includes the U.S." — the Trump administration being "clearly unhappy with the 'yuge' trade advantage the throw-away valuation of the yen affords its formidable export sector."

How to use it — a hedge / cash alternative, not a stock substitute

The yen "functions best as a hedge against market turmoil or as an alternative to holding U.S. cash equivalents or Treasury bonds."
"A big move on a near-term basis would be 10% to 15%" — "it doesn't have the type of upside that an attractive stock offers." And "a long position in the yen generates no income."

2. In plain English

The Japanese yen has gotten steadily cheaper against the US dollar — it now takes 162 yen to buy one dollar, near the weakest it's been. Hay has recommended betting on the yen to recover for a long time and admits it hasn't worked. His argument for sticking with it: the yen is now the most undervalued it has ever been against the dollar (about 50% too cheap, even after accounting for the fact that US bonds pay more interest than Japanese ones). The reason it stays cheap is the "carry trade" — because US interest rates are much higher, traders borrow yen for almost nothing and park the money in higher-yielding assets abroad, which keeps pushing the yen down. Hay thinks that's a crowded, dangerous bet because two things could snap it back hard: Japan's central bank is under pressure to raise its own rates (shrinking the gap), and governments — including a US administration annoyed that a weak yen gives Japan an export edge — could jointly step in to prop it up. When the yen last "erupted" (about two years ago) it caused a brief but severe global market scare, which is exactly why he likes it as insurance.

The honest caveat he makes: don't treat the yen like a stock. Its best use is as a hedge — something that tends to rise when markets are falling apart — or as a place to hold cash instead of US dollars or Treasury bonds. Even a good near-term move is only 10–15%, it won't compound like a great equity, and holding yen pays you no interest or dividend. So it's a defensive, "protect and wait" position, not a wealth-builder. No specific fund or ticker is named in the post, so this is filed as a macro view rather than a stock recommendation.

Macro/FX viewpoint — no security named. Summary derived from the paid Haymaker newsletter (text in transcript.txt) for personal study. Not investment advice. © Haymaker / David Hay for source material.