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Forex astrologist to yen traders: look to the stars
Fri Sep 2, 2005 9:03 AM BST
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By David McMahon

TOKYO (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 September 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 August 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.

FUNDAMENTAL HOOEY?

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 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.

September 19 is a market holiday in Japan.

© Reuters 2005. All Rights Reserved.

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