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Abe instructs Finance Ministry to keep close eye on currency markets

28 Comments
By Minami Funakoshi and Tetsushi Kajimoto

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Translation, Abe can't break promise to G7 about currency manipulation but yes man Aso can.

0 ( +2 / -2 )

I bet the Finance Ministry would never have thought of keeping a close eye on currency markets if not for the wise guidance of glorious leader Abe. We are in safe hands!

8 ( +8 / -0 )

Just what I wanted to say:

Abe with his great foresight instructed his subordinates .......

What would we do without him?

5 ( +5 / -0 )

Translation, Abe can't break promise to G7 about currency manipulation but yes man Aso can. promises LOL when it comes to a countries economy everybody is in it for themselves. Promises are like crocodile tears. Once again for those that don't know, currency intervention ISNT ILLEGAL.

1 ( +2 / -1 )

Talk is cheap. not like BoJ doesn't have floods of yen to sell. time for them to man up and put the yen on sale. At least the notion of the yen as a "safe haven" will be put to the test.

4 ( +4 / -0 )

'The deputy governor, who was speaking to reporters after the meeting, declined to comment on whether the BOJ would hold an emergency rate review to expand monetary stimulus.'

Like all private companies the BOJ has just one mission and that is its own furtherance. The yen just keeps getting stronger and stronger due to Brexit and more change will just keep strengthening the yen. Nothing will take place without American consensus anyway

So, yen strength for some time then.....

-4 ( +1 / -5 )

Translation, Abe can't break promise to G7 about currency manipulation but yes man Aso can.

Aso is a member of Abes cabinet who acts under the direction of the Prime Minister. Why would he be able to do things that Abe cant?

1 ( +2 / -1 )

@gogogogo

Translation, Abe can't break promise to G7 about currency manipulation but yes man Aso can.

Everyone in the G7 has been pumping money into the markets since Friday. That's the only thing that stopped the free fall of the pound. It's what you might call an emergency.

3 ( +3 / -0 )

So basically, he's reminding them to do their jobs. They ARE the Finance Ministry right?

2 ( +2 / -0 )

wtfjapan.

Translation, Abe can't break promise to G7 about currency manipulation but yes man Aso can. promises LOL when it comes to a countries economy everybody is in it for themselves.

And that's why Japan won't intervene in the FX markets, unless the Yen goes below 90.

To be branded a currency manipulator, when already on the Congress' list of currency manipulators to be watched, would be cutting their own economic throats with all the penalties that such a classification would entail: especially in a presidential election year and the year when the TPP is meant to come into existence.

Jaw Jaw is very cheap, a trade war would be very hurtful for Japan, especially with the country that Japan has the biggest trade surplus.

-3 ( +0 / -3 )

With Japan's economic still predicated on having a weak currency rather than innovation and new businesses, you'd think there is an election coming up with all this talk about monitoring the currency.

Last thing the officials should do if they really want "stability" is to go an intervene in the markets again to sell yen. That always causes instability. But it's not stability that they really want, it's a weak currency. That's the best economic plan these central planners have come up with, as year after year of poor economic performance passes by.

1 ( +3 / -2 )

And that's why Japan won't intervene in the FX markets unless the Yen goes below 90. if you bet on that you're a brave soul, the psychological limit is 100/$1, if you think Japan will wait till 90 you may be shocked. Trade war LOL what is the US going to do put tariffs on Japanese and Chinese imports, China/Japan can quiet easily do the same or even reduce the cheap credit they supply to the US. yes talk is cheap when the Brexit fiasco settles down Japan can intervene when the see fit and even crank up their own QE. Americas debt problems have nothing to do with Japans / Chinas currencies levels , history has proven that. The US is also set to raise its interest rates long before Japan will.

-4 ( +0 / -4 )

Do finance ministers have to be told to keep a close eye on currency markets? Really? Aso desuka.

2 ( +3 / -1 )

Blind Faith to the market

0 ( +0 / -0 )

India/Korea have already intervened since Friday to strengthen their currency, China has intervened to weaken theirs If people think Japan doesn't have the right or excuse to do the same in the current situation then you may just be cherry picking data to suit your financial ideology

-2 ( +0 / -2 )

wtfjapanJun. 27, 2016 - 01:34PM JST

India/Korea have already intervened since Friday to strengthen their currency, China has intervened to weaken theirs If people think Japan doesn't have the right or excuse to do the same in the current situation then you may just be cherry picking data to suit your financial ideology

Silly comparison.

In the last 30 years the BOJ has only intervened in the FX market to weaken the Yen. It has never intervened to strengthen the Yen.

The BOJ in the last 30 years has intervened more than 25 times - Federal Reserve Statistics.

Outright and consistent currency manipulation with the mercantilist aims of beggaring thy neighbors. Sadly for Abe and gang, the neighbor isn't prepared to be beggared anymore so that Japan can continue spending revenue that it doesn't have.

0 ( +1 / -1 )

silly comparison!? China devalues it currency continually to support its economy, Korea/India do the opposite to support theirs, how is that different, its all intervention . China has plenty of spare revenue to support their economy whichever way they chose. name me one first world economy that doesn't spend within its means. having economy A to expect economy B to not set policies that is detrimental to their economies is almost impossible since they all have a responsibility to their own economies first and foremost. The UK has just voted for a policy that they and the rest of the world is now paying for, does the average Brit care, probably not.

-2 ( +0 / -2 )

Watching the hysterical reaction of LDP-controlled NHK over the past few days you would think there was some kind of economic catastrophe under way. They even compared it to the Lehman shock this morning (thereby attempting to justify lying Abe's delay in increasing the consumption tax).

What has actually happened is the Yen has gained about 3% in value compared with last week and stock prices have dropped about 5%. Neither of these will have a significant long-term impact. No banks are insolvent, no large companies are facing bankruptcy. The fact is Abenomics does not work, and attempting to blame the state of the economy on external factors is deceitful and incorrect.

2 ( +2 / -0 )

wtfjapanJun. 27, 2016 - 02:24PM JST

silly comparison!? China devalues it currency continually

China since September 2015 has spent large amounts of its currency reserves trying to stop the weakening of its currency. It's petrified of a foreign currency exit from its markets and the effect that would have on domestic shareholders. Today it decided not to spend so much of its foreign reserves trying to maintain the existing value of the Yuan. I wouldn't call that devaluation.

wtfjapanJun. 27, 2016 - 02:24PM JST

A to expect economy B to not set policies that is detrimental to their economies is almost impossible since they all have a responsibility to their own economies first and foremost. The UK has just voted for a policy that they and the rest of the world is now paying for, does the average Brit care, probably not.

Again.. I don't know why I have to keep saying this....Japan runs abnormal current account surpluses, while most of the world would just like to balance their economies. Japan's problem is that it needs to keep running those current account surpluses and increasing them because if it doesn't the Yen will collapse. The only way for Japan to keep running them and trying to increase them, so that the problem of ratio of government debt to economic size is put off until another day, is by beggaring their neighbors and grabbing a larger slice of their neighbors wealth through beggaring thy neighbor policies of which currency weakening is a major part.

I don't think Abe, Aso or Kuroda are really interested in the financial well being of automobile exports. They are more interested in not antagonizing their trading partners who they run large trade surpluses with. The only way until now, under Abenomics, for japan to weaken their currency within controlled limits, was loose BOJ fiscal policies. However those policies have shot their last shell and until the yen gets to about 92-93 to the dollar, none of their trading partners are going to sit quietly to BOJ intervention in the currency market, and even then the intervention is going to prove only effective in the short term, unless other central banks join in with the BOJ.

This is the fact of the situation and while I'm sure you're hurting with the Yen's strength, the writing was on the wall since 2008, when everybody else lowered their interest rates to Japan's level (previous policy used for 20 plus years by the BOJ to weaken the Yen).

The Yen will remain strong, until the ECB, BOE and FRB raise their interest rates to the 3% level and that isn't going to happen in the next 12 months, especially with Brexit.

-1 ( +0 / -1 )

Oh well, at least he didn't urge him to. He only instructed this time.

1 ( +1 / -0 )

so that the problem of ratio of government debt to economic size is put off until another day, is by beggaring their neighbours and grabbing a larger slice of their neighbour's wealth through beggaring thy neighbour policies of which currency weakening is a major part. grabbing their neighbours wealth, last I check japan had lost a considerable amount of it to China the last 20yrs. first world economies are all fighting for the last remaining jobs that haven't been lost to Asia. why should Japan sit idly by and let other first world economies eg Germany US ,steal their jobs. There's nothing natural about the worlds economy over the last 7~8yrs and lets not forget the majority of the most recent worlds economic crisis, currency manipulations, QE etc originated in the US, and now the US expects everybody else to pay for their F ups, LOL please if hypocrisy was air we`d all have suffocated years ago.

0 ( +1 / -1 )

There is no way for the BoJ to intervene meaningully in the markets at this point, so why bother? It remains to be seen whether Britain actually leaves the EU, despite the outcome of the referendum. Nothing can or will be done until Britain submits the paperwork required to begin the withdrawal process, which Cameron is loathe to do, and the EU have few mechanisms for forcing Britain out. Chances are it will come to nought.

0 ( +1 / -1 )

@anotherexpat

This story is simply re-assuring investors that the BOJ is ready to intervene if there's another panic. That's what every bank was doing on Friday. But you're right, there probably won't be reason to intervene until the UK gives the markets something to react to. People are still on edge, though - that's why everyone in the G7 is making these statements.

0 ( +1 / -1 )

I bet the Finance Ministry would never have thought of keeping a close eye on currency markets if not for the wise guidance of glorious leader Abe. We are in safe hands!

Same thought here. Sounds like Kim Jong-il telling a potato farmer how to grow spuds.

-5 ( +0 / -5 )

I re fear to my post on another thread. Sorry I meant refer. But basically same game.

0 ( +0 / -0 )

So what was the Finance Ministry doing prior to this "instruction," twiddling their thumbs? It's fiscal policy that needs a major overhaul because the BOJ is basically at its limit of effectiveness i.e. monetary policy won't do much lessen the yen's climb-- Kuroda knows that waving his hand won't cut it anymore.

0 ( +0 / -0 )

Reminds me of the movie Animal House.... when Dean Dormer puts Delta Tau Chi on "double secret probation". Basically a meaningless gesture.

0 ( +0 / -0 )

Is there an end to negative interest rates? Will I get a voucher to buy a washing machine? When can I get paid to take out a loan? When is it safe to cross the road?

Answers coming soon in the debacle that is as 'the No Growth Hope Economy!'

0 ( +0 / -0 )

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