You would think that a disaster like an earthquake registering 8.9 on the Richter scalewould cause a currency to, well, swoon. But the yen did the opposite on Friday, riding to new highs after an initial plunge.
What do you do now?
Rebecca Patterson, global head of currencies and commodities at J.P. Morgan's private bank, expects a repatriation effort to bolster the yen near term, she said on tonight's premiere of "Money in Motion Currency Trading," but she doesn't expect the effect to last.
"The last thing they need right now" is a strong yen, and they will take steps to keep that from happening. I still think Japan is going to try to fight this" yen rise, she said.
Patterson recommended that investors go long dollars and short yen if dollar/yen gets to 81, with a stop loss of 78 and a target around 86.
Andrew B. Busch, currency and public policy strategist at BMO Capital Markets, agreed that shorting the yen makes sense at current levels because he is nervous about the scope of the disaster. "There is a big problem there. If it really gets much worse than it is, you're going to see the yen weaken." He also recommends shorting yen, he told Melissa Lee, the host of CNBC's "Money In Motion."