Title: Haymaker Daily — Still No Yen for the Yen (yen bull reiterated at 162/USD; record ~50% undervaluation) Show: Haymaker Daily (Substack) — paid Guest: David Hay / The Haymaker Team (Haymaker; co-founder/ex-CIO Evergreen Gavekal) Date: 2026-JUL-09 URL: https://haymaker.substack.com/p/haymaker-daily-44a Length: written post (no timestamps) Note: Paid written post, verbatim text. A short macro/FX Daily reiterating the Japanese-yen bull case. The referenced five-year USD/JPY chart and the yield-adjusted valuation chart were not captured. Body reproduced for personal study.
Hello, Haymakers:
The Japanese yen has been a repeated recommendation of this newsletter. Unfortunately, it hasn't been a rewarding one, despite our high level of conviction in its attractiveness.
Five-Year Chart (Remember: Up is actually down)
As you can see, it now takes 162 yen to buy one dollar. A key implication of this graphic is that the yen is in danger of breaking out to a new high, which would actually be a new low. Basically, this is concerning for yen bulls… like us.
However, the Bank of Japan has aggressively intervened around this level to prevent further depreciation against the U.S. dollar (USD). Its undervaluation is also becoming historic.
Per the close friend of Team Haymaker, Vincent Deluard, the yen's nearly 50% discount to the U.S. dollar is the greatest on record. The primary reason for this is the higher interest rates that are available in the U.S. This makes it cheap to borrow in yen and invest at higher rates overseas, and not just in America. Do note, however, the following chart adjusts for the superior yields in the U.S. versus Japan and the yen still looks like dirt-cheap.
Our positive positioning on the yen has given us just one chance to harvest meaningful gains. That was nearly two years ago when it suddenly erupted, triggering severe, albeit brief, carnage in global financial markets.
Its persistent weakness is undoubtedly emboldening those who effectively bet against it by exploiting the interest differential. With a currency this undervalued, however, that's a dangerous game to keep playing, especially as the Bank of Japan is under pressure to continue boosting rates. There is also the very real potential for coordinated support of the yen that includes the U.S. The Trump administration is clearly unhappy with the "yuge" trade advantage the throw-away valuation of the yen affords its formidable export sector.
Do be aware, though, that 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%. In other words, it doesn't have the type of upside that an attractive stock offers. Moreover, a long position in the yen generates no income.
The Haymaker Team