Yen's rise as G-7 discusses slump in Japan’s shrinking economy - predicted by charts that signal more to come

It's always interesting when "the news" is forecast by clues from the charts themselves:

Yen Rises as G-7 Says Slump to Persist, Japan’s Economy Shrinks

Feb. 16 (Bloomberg) -- The yen rose after finance ministers from the Group of Seven nations said the “severe” global slump will persist for most of 2009 and Japan’s economy shrank by the most since 1974, spurring investors to sell riskier assets.
The yen snapped two days of losses against the dollar and the euro as G-7 officials avoided making any statement in support of efforts by Japan to weaken its currency. The pound fell versus the dollar after the Confederation of British Industry said the U.K. economy will contract at almost twice the pace previously forecast this year. The euro also dropped against the dollar.
“Investors are starting to price in the prospect of this recession lasting longer than previously expected,” said Lee Hardman, a currency strategist in London at Bank of Tokyo- Mitsubishi Ltd., a unit of Japan’s largest publicly traded bank by assets. “The yen will remain quite firm in the next three months before it starts to drop off.”
The yen dropped to 117.21 per euro as of 4:51 p.m. in New York from 118.37 on Feb. 13. The yen gained to 91.77 against the dollar, from 91.93. The dollar strengthened to $1.2770 per euro, from $1.2862.
Japan’s currency may appreciate to 110 per euro in the next three months as the European economic outlook worsens, Hardman said. Japan’s own poor economy will drive currency to 100 versus the dollar by year-end, he said.
....
The rising cost of insuring against default by a “peripheral” European government “remains an important background negative for the euro,” Steven Pearson, a strategist in London at Merrill Lynch & Co., wrote in a note today.
-Yen Rises as G-7 Says Slump to Persist, Japan’s Economy Shrinks (Bloomberg)

Folks, if you have been watching what we've been discussing here in the charts of the yen, you know that we've identified the probability that the yen not only continues to strengthen but also has been positioning to move to new all-time highs. That positioning appears to be taking the form of a classic triangle that will confirm a resumption of the yen's uptrend when it breaks out of the triangle to the upside. If you haven't already seen our charts of then yen and where it's likely heading, you can click on the "Yen" label in the labels list at the right side of this page to see what we're seeing.

Not that it makes me happy to see it from a fundamental perspective, but it is nice to get the heads' up from paying attention to what the charts are saying ahead of time!

*Added: and here's some news today on the dollar and euro - so far so good:

Dollar index hits 2-month high as pound, euro fall - TOKYO, Feb 16 (Reuters) - The dollar rose to a two-month high against a basket of major currencies on Monday as losses in the euro and the pound accelerated on financial worries about central and eastern Europe and in the wake of the weekend G7 meeting.
Group of Seven finance officials meeting in Rome on Friday and Saturday made no mention of sterling's weakness in their statement even though market players had expected it could be a topic.
The pound had risen against the dollar ahead of the meeting and was sold off again on Monday.
The dollar index, which tracks the value of the greenback against a basket of six currencies, rose 1 percent to 86.871 .DXY, its highest since early December.
The euro was down nearly 1 percent at $1.2740 . Traders cited concerns about European banks' exposure to central and eastern Europe, with rating agency Standard & Poor's saying it could cut Ukraine's rating. (Reporting by Rika Otsuka)

Japanese Economy Shrinks at Nearly 13% Annual Rate in Q4: No Relief in Sight (naked capitalism, 2/15/09)

Dollar, Yen Gain as Recession Fears Grow (Contrarian Profits, 2/16/09)