The Unwinding yen carry trade?

The yen is skyrocketing recently against the USD, CAD and the AUD over the last few days. The chart for the JPY vs the AUD is especially astounding as people are unwinding their carry trades. The recent spike is astounding. The other thing, however is that I am quite certain that the rising valuation of the yen is unsustainable against other currencies and there should be a correction happening eventually. The question is at what price and how volitile things will be during this time period.

One thing that I appreciate after coming back from Cambodia and Vietnam is an understanding of the bartering system, where the prices of goods is often bartered between the customer and the store clerk. Prices do vary between shops and it is very interesting to see how prices can be very fluid between places. Everything is driven by the sentiment of the store owner, the customers and other market circumstances and this experience is equally applicable to the stockmarket.

One intersting observation that I made about the merchants that I bartered is that they liked to ask where I was from. Basically, what they were trying to discern is what price would I be willing to buy something by the living standard of the country that I lived in. A Chinese person might price things differently from an Europeian and etc. When it comes to the stock market, instead filtering the buying and selling patterns of people by country, one would need to understand the trading motivations of different financial institutions. Meaning that different people would have different ideas of what a fair price for the same financial instrument.

Anyways, I am very tempted to sell more of what yen I have into other currencies, but the question I am trying to figure out is how long will the sell off in the stock market will continue. I believe that the yen will continue to strengthen the worse things get in the stock market. The question is when will the sell off stop, at what price will people start selling yen and etc. All of this is really hard to figure out.

When it comes to the financial market, one cannot look at companies in isolation but also other traders and their motivations in the market. I have a new appreciation for that and very interested in developing tools in trying to understand the financial conditions of the other players in the market. As in poker, you have to be able to keep track of the number of chips everyone else has because how people play is also dependent on the number of chips they have.