USDJPY resistance around 103.00/.50

USDJPY exchange rate volatility decreased in February with the currency pair trading in the 100.75 to 102.75 range since the beginning of the month, following a slump of five big figures in January. We remain bullish on the USD versus the JPY though, given the monetary policy divergence of the two countries' central banks. The BoJ hinted at further stimulus while the Fed is widely seen to continue its tapering efforts moderately but steadily. The chart tells us that USDJPY will hit some resistance in the Y103 to 103.5 range. Should the rate manage to break above that level, we see the USD moving towards Y105 again.

Bigger picture: The depreciation of the JPY can hardly be of benefit to China, which recently intervened in an attempt to signal market participants that it won't accept the CNY to go in one direction only. You should expect more two-way volatility for CNY exchange rates from now on. If Japan will continue to devalue the JPY in one way or the other, China and other Asian countries will be tempted to do the same with their currencies so as not to put their exporting businesses at a disadvantage. This may well culminate in a currency war in Asia and a deepening of the conflict between China and Japan. If you have exposure to Chinese or Japanese assets and currencies, do not lose sight of this particular risk. We see plenty of potential for disputes that may ultimately bring a new round of war rhetoric in the second quarter of 2014.

Market for virtual goods

http://techland.blogs.fortune.cnn.com/2008/07/14/cashing-in-on-virtual-goods/?section=magazines_fortune

According to this Fortune article, the market for virtual goods is huge: In China, it is even bigger than online advertising! Now, I knew that there were lots of people spending their hard-earned money on virtual items they would then use in video games, but just how big the market really is I did not know.

It turns out that in China gamers spend an estimated $1.2 billion annually on virtual goods. For comparison, online advertising spending in China has been about $1 billion, a staggering 20% less than spending on virtual swords, armors or the other equipment and items you need in an online game.

And this market is still very young, so notionally it's still a good time to enter. But unfortunately, getting into the market for virtual goods as a seller might turn out not to be that easy after all. There are lots of professional companies hiring hundreds of Chinese gamers, who sit in front of their computers for countless hours, providing their labor for cheap in order to get their employers the coveted virtual goods which the company will later put up for sale on the Internet. So simply playing video games on your own won't be very productive compared to the level of professionalism of these Chinese gaming companies.

Still, this is yet another great opportunity that has come along with the Internet in the recent years. Maybe starting a specialized trading platform or auction house for virtual goods could be profitable, as well. (Live auctions, anyone?)

Lots of untapped opportunities on the web waiting to be picked up by us and turned into something valuable.

VeriSign Domain Industry Brief; Local Domain Markets

VeriSignGlobal registry operator VeriSign has published its June 2008 Domain Name Industry Brief (PDF). According to the report, the base of domain registrations has grown 26 percent in the past twelve months and six percent quarter over quarter. This marks yet another significant increase in the number of domain registrations and is further proof that there is no slowdown in sight.

ChinaThere are now more than 162 million domain names registered; .com is still number one, followed by ccTLDs .de (Germany) and .cn (China). VeriSign reports that Germany's .de TLD comes in second, but I have already heard reports elsewhere that China's .cn has overtaken .de. Anyway, both of these country-code domains are highly popular and they will continue to grow as more and more people in Asia get reliable Internet access and IDNs (internationalized domain names) become more popular and more widely used.

But not only .cn has experienced double-digit growth quarter over quarter (it grew 23 percent), Poland's .pl, Spain's .es, Russia .ru and France's .fr have seen large growth as well. There are big opportunities in local domain markets, so if you find yourself in the position to invest in foreign language domains you might want to look into this more thoroughly. Personally, I've recently been watching the German IDN market, although I haven't committed to any investments, yet. China, Poland and Russia look very interesting too, in my opinion.

IndiaAnother growth market one should keep an eye on is India. VeriSign says that, despite the fact that the .com and .in TLDs are well-known and established in India, most people still don't understand what domains are and what services to associate with them. Therefore, the vast majority of domain registrants in India has been medium and large businesses. So there is lots of potential untapped when it comes to small businesses and private domain registrations. As soon as these groups will begin to demand more domain names too, both the primary and the secondary market will become even more interesting. At the end of the first quarter of 2008, there was a total of 1.2 million domain registrations in India, which represents a 46 percent increase over the same time last year. About 60 percent of these domains are .com or .net domains and 40 percent .in domains. I expect the number of domain registrations as well as the number of aftermarket domain sales in India to grow at similarly high rates in the future. Investing early could yield higher returns than waiting until demand for and knowledge about domains in India has finally gone up.

China's .CN now largest ccTLD

DotCNAs reported by DomainNews.com, China's .cn domain extension has become the world's largest country-code top-level domain (ccTLD). This means .CN has overtaken long-time leader Germany (.de). There are now about 12,300,000 .cn domains and roughly 12,100,000 .de domains registered, according to David Goldstein of DomainNews.com.

Only the generic .com TLD is bigger than these two ccTLDs: there are more than 76 million .com domain names currently registered. (Source: WebHosting.info)