Dennis Gartman: Why I’m Selling Japanese Yen
The Japanese government has given a "sell" signal for the yen, Dennis Gartman, editor of The Gartman Letter, said Wednesday on CNBC.
"I've been short of yen for quite some time," he said. "I'm short of yen against dollars, generally."
On "Fast Money," Gartman said he was short of yen in U.S. dollar, Canadian dollar, Australian dollar and New Zealand dollar terms.
Over the past six or seven months, Gartman added, the trade is working out.
"I think it's abundantly clear that this new administration has made it very clear it intends to force the Bank of Japan to supply Japanese yen in unlimited terms," he said. ""I can't remember ever having heard that before.
"You have to remember, a government has a hard time strengthening its currency. But governments can very easily weaken their currencies simply by printing them. And when the Japanese said they're going to print them in an unlimited fashion, you have to believe them."
Gartman said that Japan was "going to take rates to negative numbers before it's done."
A decline in domestic consumption for Japan meant that its options were limited. "
"They're going to have to continue to export goods and services out of Japan, and the only way they can do it is by devaluing the yen," Gartman said.
"What do I care whether they can or cannot create inflation as long as they are going to create more yen? This is the first time we've seen an authority in Japan use the term 'unlimited,'" he said.
An alternate trade was to buy Japanese equities, Gartman said.
"I think the Nikkei is on its way to 15,000 over the course of the next several years," he added. "If you don't like trading currencies, trade the Nikkei because that's going to be a corollary to the Japanese yen itself."
