Financial Astrology in Japan
Forex astrologist to yen traders: look to the stars
By David McMahon
TOKYO, Sept 2 (Reuters) - In late September, a full moon will light up the sky and Mercury's orbit will take the planet to the opposite side of the Sun from the Earth.
Lucky for the dollar, says Yasuji Yamanaka, a self-described forex market astrologist.
"Something big is going to happen on Sept. 19," said the forex trading veteran who in 2002 started his own trading consultancy company in Tokyo, Ascendant Inc., after 20 years on the trading floor at Bank of America and Nikko Citigroup.
"In astrological terms it's the biggest day of the year for financial markets."
Yamanaka started dabbling in astrology in his Bank of America days, where he rose as high as vice president of the Tokyo office, after stumbling across a book about astrology in a Tokyo bookstore.
"At first I thought the whole idea of using astrology as a trading tool was ridiculous," said the youthful-looking Yamanaka, casually dressed in an open-necked shirt and sandals and sipping a beer in a bar near his company's office in central Tokyo.
"I started using it half as a joke, but to my surprise I started to find that it can really work."
Yamanaka now writes a weekly report for the Japanese brokerage Livedoor Securities that provides short-term trading cues for currency investors based on a blend of charting techniques and the astral calendar.
The reports are striking a chord with some Japanese traders, who may be more superstitious than most and often pray at shrines for good luck at the beginning of each year.
Yamanaka's missive attracts around 1,200 readers a week, and he reckons at least a third of these are fanatical readers who, at least secretly, are putting some of his predictions to the test on the trading floor.
"It's a bit hard to make excuses if you lose a lot of money on this astrology thing," Yamanaka said. "But when the fundamentals, the technicals, and the astrology all point in the same direction, you've got a really good reason to buy or sell."
Yamanaka had some Tokyo forex traders talking last month with a report predicting a weaker dollar on Aug. 19.
The reason: A special type of full moon was set to bring the moon to its nearest point in orbit to the Earth. The dollar edged down slightly on the day.
TRADING ON THE STARS
Yamanaka is not the first trader to look to the stars for guidance. U.S. financier J.P. Morgan is said to have regularly consulted a famous astrologist in the 1920s for financial advice.
Bill Meridian, a U.S. fund manager based in Abu Dhabi, even manages money for wealthy investors based on financial astrology.
His book "Planetary Stock Trading" is regarded as somewhat of a bible among astrologically-minded stock pickers, who believe patterns like the 29-day cycle of the moon revolving around the Earth can affect the behaviour of investors and move markets.
For some traders, it's more a matter of superstition than looking to the stars for guidance -- and some of those contacted for this story asked they not be identified to keep their employers from learning about their superstitious inclinations.
"I used to have a lucky escalator I'd be sure to ride on the way to work every morning," said a senior forex trader at a foreign bank in Tokyo. "One day it was closed for maintenance and I took another escalator. I lost a load of money."
Many Japanese traders avoid the number four, which is a homonym of the word for death in Japanese. Nine is also seen as an unlucky number, since it can also be read to mean suffering.
"If you're a trader you don't want to be getting out of bed at 4:40 in the morning," said Ken Masuda, senior stock dealer at Japanese brokerage Shinko Securities. "Certainly nobody in Japan would ever support a sports team called the 49ers."
Masuda also doesn't like the number 23. It's the date an old girlfriend said goodbye to him, breaking his heart.
For many traders, the use of superstition, astrology, and other unorthodox guides on the trading floor belies an intense distrust of fundamental analysts.
"Nobody makes any money from listening to fundamental analysts, unless you're talking about a very long-term timespan," said Yamanaka, who just published his second book in Japanese on financial astrology.
"If you're a trader, you've got to use anything that works. So why not astrology?"
Fundamental analysts have certainly got it wrong before.
A Reuters poll in January showed that a majority of analysts, who base their forecasts on economic fundamentals like interest rates, economic growth differentials and trade balances, saw the dollar bottoming at 95 yen <JPY=> or lower this year.
But the greenback had risen to almost 114 yen by July, and although it has fallen back to around 110, few see it going anywhere near 100 in a hurry.
Superstitious Japanese forex traders can breath a sigh of relief as the planets align in September.
Sept. 19 is a market holiday in Japan.