business

Battered yen faces new ball game, more losses after Trump win

24 Comments
By Shinichi Saoshiro

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© (c) Copyright Thomson Reuters 2016.

©2019 GPlusMedia Inc.

24 Comments
Login to comment

It's far overdue for the yen to drop to 75 per $US.

-11 ( +5 / -16 )

This drop in the Yen's value is the BEST THING for Japan's economy. With a lower Yen, Japan will have a easier time with exports and this will hopefully get Japan Inc. back up on its feet and get more people working again.

3 ( +13 / -10 )

KnowBetter, the collapse in the yen since Abe took power has been a disaster for ordinary Japanese workers and savers as their purchasing power has plummeted. Japan Inc. has shown that when a debased currency allows them to make record profits, very little of that money trickles down to employees.

2 ( +10 / -8 )

This is mainly due to dollar strength from weakness in the world's main "safe haven" of gold.

The gold price dropped due to India's cash ban. For now, the world's largest buyer or gold has no cash to buy it.

Gold therefore lost value. Dollar got stronger. Yen effected. Don't forget, India PM Modi was in Japan the moment the cash ban was announced there last week. Probably an India/Japan bond purchase or something was quietly agreed on to help unload some yen in order to get the inflation Abe desperately wants.

5 ( +6 / -1 )

A disaster for ordinary Japanese workers? Really? Record low unemployment and real wages finally going up? A GNP rate of 2.2%? The strongest labour market in the world?

-10 ( +5 / -15 )

t's far overdue for the yen to drop to 75 per $US.

Nope, it is overdue for the yen to weaken further. For some time the currency values have not been determined by market principles, but by the rampant print, borrow, and spend policies of developed countries. A country's currency is nominally valued by the stability of the issuing country's economy. Japan's economy certainly isn't stable, but then again, neither are the economies of Japan's peers.

The markets are trading mostly on hype, and not much on substance, because there has been no private sector economic substance since GWB was in office.

I greatly doubt that Trump plans on any massive fiscal spending plan. These massive spending plans have been enacted over and over, and they have continued to fail. More of the same is not likely to work. More likely, the market thinks that Trump may try to move the markets and economy away from their dependence on central bank policy, and continued heavy public sector spending. It would be nice if the economy returned to the system of the horse pulling the cart (the private sector creating jobs, growing wages, and more revenue), instead of the other way round.

9 ( +10 / -1 )

Personally, I'm happy with a weak yen, but we'll have to put up with the (understandable) whining from foreigners who are only here for a year or two.

3 ( +10 / -7 )

It's far overdue for the yen to drop to 75 per $US. the only way thats going to happen if the US starts up another round of QE. Historically speaking the Yen has only evey been below 100yen/$1 while the US has been printing mountains of cash. Now the US is actually going the opposite route of raising interest rates 75yen/$1 is highly unlikely.

6 ( +8 / -2 )

@Dan: Totally agree. I am transferring funds here eventually so a weak ¥ to me is fantastic news.

-4 ( +3 / -7 )

Japan Inc. has shown that when a debased currency allows them to make record profits, very little of that money trickles down to employees. yeah and a high currency which takes a hit on company profits means there is 0% chance of employees getting a bigger salary/bonus. And no the answer isnt domestic consumption, as the population shrinks so will domestic consumption.

1 ( +3 / -2 )

The answer in any case is not "currency manipulation", higher or lower.

The answer is pro-growth policies!!

I think the markets are treating the US dollar and stocks good now (and bonds bad) because they are expecting that the new US government will proceed to slash corporate tax rates (making it more attractive to do business, thus boosting investment and demand for labour there), simplify the tax code (making it more attractive to do business versus dedicating resources to optimally exploiting the tax code - again with the same positive results), and also get rid of lots of useless government regulation and bureaucracy (ditto).

Japan was supposed to have gotten started with all of this stuff 3-4 years ago when that 3rd arrow of Abenomics was talked of (and the Japanese market went up in expectation of it), but we all know how that's turned out. No actual implementation, and thus no results. (Thankfully the money printing hasn't had either the desired or undesired results, too)

This is what economic growth should be about (not attempts at currency debasement), and as of today at least, this good stuff looks likely to come to America long before it comes to any other market.

On the flip side there is the possibility that Trump pushes stupid and counter-productive trade policies, but I suspect that the markets are giving the benefit of the doubt to the probability that Trump was talking big on that stuff and isn't going to do much more than some tokenism like a typical politician would do when it comes down to it. The focus will be on the other stuff.

If of course the US government implements no such policies in the end (or only does Trump's daftest ideas), the markets will recognise it and punishment will be administered accordingly. But unlike the gutless Japanese career politicians, I don't doubt that the republican government will hesitate when it comes to doing these things, when they have the house, senate and presidency all on the same page.

There potential is there right now for some unbelievably good things to come of the election, and hopefully it all comes to pass.

Then lots of people doing it tough in recent times will be much happier, and in aggregate we'll all be much better off.

Merry Christmas everyone.

1 ( +5 / -4 )

One thing I've learned after all these years is that exchange rates are, well, variable . . .

2 ( +3 / -1 )

Oops! I meant that the other way around, like 125 yen for one $US. Bad math, on my part. Sorry folks.

4 ( +6 / -2 )

With a lower Yen, Japan will have a easier time with exports

A large portion of Japanese production has already been sent overseas, so a weaker yen will have limited effectiveness in stimulating exports.

-4 ( +3 / -7 )

Weak yen is great news for all. 109 yen to the dollar right now. Part of my income stream comes from the US so I'm very glad to see the yen dropping like a stone. As it should considering how bad the Japanese economy is. Let's all hope that the yen truly sinks from now on!

-1 ( +6 / -7 )

"A large portion of Japanese production has already been sent overseas, so a weaker yen will have limited effectiveness in stimulating exports."

Not really, Japan is a prime global supplier of machine tools, chemicals, components, etc. -- high value-added things the average consumer doesn't see.

-3 ( +4 / -7 )

Oops! I meant that the other way around, like 125 yen for one $US. Bad math, on my part. Sorry folks. 125 seems a little far fetched but 110~120 is the range itll probably be eventually. And so many JT financial experts were predicting the yen to be in the low 90s by election end. Glad i don't follow their advise.

5 ( +5 / -0 )

Trump has done what Abe dreams about and Trump doesn't officially take the reins until Jan 2017!

2 ( +2 / -0 )

Trump achieves what MOF & BOJ have been trying so hard without success in past 2 years; a weaker Yen.

2 ( +3 / -1 )

Yep another brilliant day, with the yen at 110.50 to the dollar and dropping! Christmas is coming early for each and everyone of us! I'm hoping for 125 and beyond in the near future. Hail TRUMP!

-2 ( +3 / -5 )

The falling yen is indeed good news for each and every person. Like many on here I guess , I receive large investment incomes from the US so the falling yen is highly welcome to me. The election of Trump is a great thing but I wonder how much longer the yen's collapse will continue and how far a drop we can achieve? Dare we hope for 120 yen to the dollar? Many now think it is possible given the basket case of the japanese economy and the sheer optimism surrounding the election of Donald Trump.

-2 ( +2 / -4 )

The falling yen is indeed good news for each and every person.

Not really. Material goods go up in price with a weaker yen, as overseas purchasing power decreases.

Companies that depend upon exports make more, but little of that trickles down to the people.

Personally, the strong yen benefits me, as our company has regular income coming from overseas. But for most people, it hurts, not helps.

-2 ( +1 / -3 )

yep with Trumps plan of heavy spending, corporate tax cuts and the Feds expected to raise interest rates soon the dollar is set soar like an eagle..!? .... well go upwards anways.

0 ( +0 / -0 )

I have a feeling Fed will not hike interest on December as almost all expect,simply because up till now what is happening in markets have no fundamental base nor reasonable reasons,just mere great expectations,I don't think it will come true that easy or simple as many wishes or hope.Up till now hyper optimism behavior move markets.Remember few days ago same markets were so sepismistic about Trump ,but because as we all know-money never sleeps-markets have to make money in all ways.Colorado Fed president said on Thursday"we can't be shoe before coming of new administration"that's sounds logical for me,but who knows?!never say never.The question is,how will the situation if Fed won't hike interest rate on December?

1 ( +1 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites