Yen set for turnaround in 2023 after slide to 32-year low against dollar

Their relentless efforts to jawbone the yen value downwards depends for its success on the willingness of the masses to accept stagnant or declining wages and standard of living in a time of surging prices. While we’re already seeing some blowback, in the form of growing desperation at the margins, they figure their reservoir of gaman is sufficient to see them through an evisceration of global capital that has only just begun. In this game of endurance, they’re settling in for the long haul. The rest of would be well advised to raise the storm sails and batten down; we’re in for some chop.

@fxgai - I think we are 70-75% in agreement. Kurodas play was quite amusing pre Christmas, widen the band for 10y JGBs AND then announce to buy more all the way across the curve. One thing I can tell you (as you probably know) - The rates markets are pretty one way and shrug off any extra buy backs 24 hours later.

@theResident,

Yes the BOJ have been buying JGBs for years, but they have stamped on the accelerator again in recent months, buying record amounts of them, as the government continues to spend more too.

For me, intervention through selling dollars to buy yen is silly, when the BOJ is printing more and more yen. In the end the yen has thankfully had some reprieve but that’s more due to others factors than the two interventions, methink

If the war in Taiwan breaks out next year, things will be much more worse for Japan.

@fxgai: But they've been gobbling up JGBs for years now. It was only a mix inflation / FRB action / 10y JGB/UST yields widening that got us to 150 VERY briefly. Now that's cooled, unless things get very overheated in the US, I don't think we go back there and I'd expect intervention relentlessly.

And I said it would be back to 125 shortly, after it touched 150. It's the natural level, especially after Kurodas pre Christmas surprise. Like @gintonic, I am no analyst either.

Why does anybody think that it will reach 200?

Anything better than the 32-year low is a turnaround!

In October, did anyone say the yen would make a comeback? Not a single analyst. I can’t see any reason for it.

The yen rate will be around 200 yen by 2024. Wait for it. It's always interesting to see how they use the media to try to influence the market.

I'll believe it when (if!) I see it!

Pass the popcorn & beer nuts.

Kyodo just an LDP mouthpiece with the top stacked with party amakudari apparatchiks.

You can say that again. These writers' non-stop cheerleading for the inflation and devaluation which Japan Inc. wants and which ruin the lives of the 99% is nauseating. Seemingly every article has paragraphs like this one inserted:

A stronger yen trims profits earned overseas when repatriated and undermines the price competitiveness of Japan-made products abroad.

It's like they're copy-pasting it from a template.

Japan is the world's biggest creditor nation.

This includes the foreign assets that I personally hold, for example. Eg I sold my yen to buy my foreign assets.

Its currency is not going to collapse.

That people like me sold yen and hold foreign assets does not really support the currency issued by the central bank here. I will not be selling my foreign assets for Japanese one’s any time soon.

The currency could collapse, and be replaced by a “Shin Yen”, all while we foreign asset holders watch with concern.

The government is spending record amounts of money, and the central bank is printing at record pace. Where is the demand for all the extra yen that has been printed to come from?

I don't expect prices of commodities etc. to fall to pre-war levels, but there is little reason for them to continue rocketing as they have been. I expect the Fed to ease off on US interest rates, which will send the yen higher, or back to closer to where it was.

Remember that when anyone says "it's going to 200!", Japan is the world's biggest creditor nation. Its currency is not going to collapse.

Says who????????????

If the yen goes up, will salaries?

In asking the question, you already know the answer. Regardless of whether the yen is rising or falling, both constitute sufficient reason to deny any increase. It goes without saying, however, that each constitutes sufficient justification for a ‘backward advance’ (to borrow Japan’s Guadalcanal reversal euphemism) in salary.

Good, maybe I can afford to buy stuff on Ebay again.

Japanese authorities stepped into the currency market in September when the yen faced heavy selling pressure. The authorities' determination to stem the currency's plunge in Japan's first yen-buying intervention in about 24 years helped alter the course of the currency pair.

You are off by 12 years, Japan intervened in 2011 after the earthquake with approval from other nations and illegally all the time in secret.

Source: https://www.reuters.com/markets/currencies/yen-stealth-intervention-aimed-maximising-effects-says-japan-finance-minister-2022-11-01/

The pirate dollar that has strangled this world. Hopefully sooner rather than later the New World Order that is to come will end this dollarist scam..

The New World Order is the dollar!

The yen should be worthless against the dollar, there is no productivity in Japan and all the salarymen I see here only contribute to society by eating bentos for lunch and drinking cheap liquor at night.

While I enjoyed the 140-150 seen this past year, I'm content to settle into a 120-125 zone, which is a nice compromise between those who rely on foreign income, such as the car and electronics industries and many expats like myself, and the residents and businesses relying on local revenue.

I didn't at all care for those times from 2016-2020 where it hovered close to 100.

I'm going with 110.

Yeah and those same analysts predicted the almost 150 to the dollar for 2022. NOT

Next.

It will mean more spending power for Japanese living and working abroad, so that’s good.

"But this is going to change dramatically next year," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities, referring to the expected yen's rebound against the greenback.

How so.

Normal economies have policy rates circa 4%. If they stop hiking those short term rates, it doesn’t mean the interest rate differential is going to dramatically change. It will stay about the same - unless the BOJ dramatically hikes rates or the foreign central banks dramatically cut their back again.

The BOJ will not raise short term rates. They are busy buying up record amounts of government debt. They will not hike short term rates at the same time as they gobble up all the JGBs. And they will continue to gobble up the JGBs because the government wants them to continue to bankroll all the crazy spending, and to keep borrowing costs low on the outstanding quadrillion of debt.

I would like to see Japan gets its fiscal affairs in order, but I don’t see that happening at all. These Japanese analysts that Kyodo is quoting are trying to put lipstick on the pig and the beginning of a new year.

It would be amusing to see what these analysts were saying at the start of 2022, versus what actually happened.

The pirate dollar

LOL… LOL….

Hopefully sooner rather than later the New World Order that is to come will end this dollarist scam..

What New World Order? Why all the hate against Americans for??

Yen set for turnaround in 2023 after slide to 32-year low against dollar.\

Absolutely the J-Gov Oyaji's have been to the shrine and prayed for it to be so power of new years shrine visits.

The pirate dollar that has strangled this world. Hopefully sooner rather than later the New World Order that is to come will end this dollarist scam..

Have some friends visiting this year and I told them last December to buy their Yen now as forecasts predict that the Yen should strengthen in 2023.

Readers, the wrong story was mistakenly published. It has now been corrected. We apologize for the mistake.

Let's hope the yen strengths, it will have many many benefits 1) cheaper airfares out of here 2) better rates for those who remit money 3) Cheaper fuel costs.

If the yen goes up, will salaries?

Interesting. We’ll see how much they can pull this off.

We will see. What is sure though is that the JPY is up 13% against its bottom. But companies still use the argument of the weak JPY to justify the large price increases they already announced for this year.

Says Kyodo? The market decides if the yen will turnaround not a media company.