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Japan unlikely to win currency 'war of nerves' against speculators: analysts

32 Comments
By David Watkins

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© 2011 AFP

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32 Comments
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It's the BOJ vs. the rest of the world. Hope Azumi can back up the tough talk. And to be fair, while China intervenes the most, others like South Korea and even Switzerland have intervened in 2011. Every exporting country is out for themselves.

1 ( +1 / -0 )

Just saw travelex's boards in Shinjuku... seems this has backfired as everything is almost to where it was on Friday!

0 ( +0 / -0 )

what's so positive about intervention? Yen is down so is Nikkei, losing trillions of Yen decisively :)

-2 ( +0 / -2 )

Already lost 50% of what it gained, Japan is just giving money away

0 ( +1 / -1 )

Like taking a handful of sand to the Sahara desert...

-1 ( +0 / -1 )

Why isn't anyone buying the Chinese Remimbi and American Dollars?

-1 ( +3 / -4 )

Who are these "speculators"? LOL... a risible accusation attempting to personify a scapegoat causing wildly erroneous valuation of the yen in international currency markets. Please!! It seems to me the BOJ is the speculator when it tries to take "corrective" measures like this. They don't really work, do they? Who is the speculator now?

1 ( +2 / -1 )

Once again, its the Japanese government trying to prop up Japanese business profits on the backs of the taxpayers. Its an easy, quick fix but not long-lasting solution. The politicians can say "look we did something" just like US politicains when they say "look, we saved Social Security for the next generation" of course, now the retirement age will need to be raised to 75....

-1 ( +1 / -2 )

What a stupid headline. The market does not have "nerves", the market simply is. And as long the US and EU are trashing their currencies, the yen will go up, relatively speaking. Instead of buying these stupid dollars, the BOJ might as well have a bonfire with their yen.

0 ( +1 / -1 )

@JapanGal: The BOJ is buying Dollars! Everytime they intervene.

-2 ( +0 / -2 )

Japan is unlikely to win its “war of nerves” with market forces as it battles to cap a soaring yen, say analysts, who fear a lack of G20 unity on currency policy may inflame tensions at a summit this week.

Finally someone said the correct thing... Who is the idiot in charge that thinks doing this is going to fix things?

0 ( +0 / -0 )

Now this is probably rather naive. I am not an expert on national economics.

So, the yen is too highly valued against the US Dollar and the Euro? Since Japan is a sovereign nation, can it simply not print more yen? This, using the supply and demand idea, should devalue the yen, right?

Then they could use that money to finance the Tohoku rebuilding effort. Or, give it out evenly to the people to raise domestic consumption.

If for some reason, printing money is not possible, perhaps buying products prized in Dollars could change things? Basically, go on a shopping spree now that the yen is high. Increase the size of the strategic oil reserve. Buy some small pacific island. Anything but dollars!

2 ( +3 / -1 )

Actually, I belive Japan should print and sell as much yen as possible at the moment. The long term dynamic for the Yen is downwards by a massive amount once debt situation becomes the world's focus. At that point Japan will need all its foriegn currency reseves. So at present Japan can cheaply build up several trillions in Foregn currency, industrila minerals, gold reserves whilst it controls the overvalued yen and burns the speculators.

0 ( +1 / -1 )

I think we are getting ripped off at the gas pumps!! The yen is so strong but gasoline prices?? Highway robbery!!!!

0 ( +2 / -2 )

Print lots of money. We can use the inflation here moderately anyway.

0 ( +2 / -2 )

Why isn't anyone buying the Chinese Remimbi and American Dollars?

hello?? are u there? the JP govt is..

0 ( +0 / -0 )

Maybe all the idiot traders got suckered in to selling the yen off for the US dollar during the huge move, but we know the Japanese finmin can't withstand a good intervention like the "Gnomes of Zurich" can. The smart money just waited for the finmin to place their selling trap, but it was so obvious as to what price point the intervention was finished at, it was laughable. Ready to buy into the retracement with no fear whatsoever.

Thanks for the free money.

0 ( +0 / -0 )

Jun's going to have to start thinking about organizing a panel to discuss measures to make decisions about thinking about decisions.

-1 ( +0 / -1 )

How come the Japanese gov't can't do what the Chinese gov't does with their currency and just peg the yen at, say, 100 yen to the dollar?

0 ( +0 / -0 )

"speculators"

Can we sue them for causing all this misery?

0 ( +0 / -0 )

Been saying for months just print more yen, it creates inflation the economists tell me, so what , it lowers the price of the yen and will solve so many issues (unemployment, manufactuirng slow down, tohoku rebuilding) it needs to be done and deal with alittle bit of inflation later.

At the moment the j govt are thinking about where is the fire wood and how they are going to dry their clothes instead of trying to swim to shore and save themselves from drowning, first stem the crippleing high yen, then worry about inflation which every country is going to have to deal with.

Typical though these idjits will do exactly the opposite to what is sensible.

0 ( +0 / -0 )

Japan has to do what Switzerland did, announce an unlimited intervention, not a limited one. If interventions are limited, then they do not influence enough market expectations and speculators will ignore them after a while. I don't think that most of Japan's trading partners would protest much, as the Yen has strongly appreciated, if it declines a little, it will still be worth more than it did 5 years ago.

By the way, for those who think that the Yen's rising value is just because of actions taken in the US and in the Eurozone that devalued their currency, note that the Yen has also risen against currencies from countries that have done no such thing (BTW, though the Eurozone has many problems, the ECB has not taken any action to devalue the Euro, and still tries to maintain price stability at any cost, which is the #1 problem in Europe). The Yen has risen against the Canadian dollar, the Swiss Franc, the Australian dollar, etc... In fact, I do not know of even one currency against which the Yen has fallen in the last 5 years. That indicates that it is the Yen is rising and that the tale that the Yen is staying put and that it is only a few currencies that are being devaluated is just plain wrong.

2 ( +2 / -0 )

Please please I need the yen rate to go up to ¥120 to the $.... Who controls this? Heard way back when (1983~) the yen was ¥150 to the dollar, everything would be fine....and now in 2011 Honda, Nissan & Toyota loses $400,000,000 dollars for each yen increase. And they say China is manipulating the currency.

0 ( +0 / -0 )

Note to Japan: Print money. This will address several big problems.

-2 ( +0 / -2 )

With the Greeks refusing to act like a responsible German, we are all screwed ..........so let's just print more money, easy monetary policy and have a great party. The world is going to " end ' in 2012 anyway. Cheers !! LOL

-2 ( +0 / -2 )

Greek referendum may be dead after all. Greek is on the way to collapse tonight. Investors are moving assets to Japanese Yen and US $.

-2 ( +0 / -2 )

@JapanGal: The BOJ is buying Dollars! Everytime they intervene.

Incorrect, BOJ is buying other currencies such as EURO too.

0 ( +0 / -0 )

@glovalwatcher: Yes, I am aware of this, how does that make my comment "incorrect"? At no point do I say that they are just buying Dollars. JapanGal clearly doesn't understand the basics of intervention, hence ironchefs and my reply to her.

-2 ( +0 / -2 )

Time for BOJ to print Yen, and supply unlimited amount say at 85 to a $. Used $ to buy global stocks, resources, oil, invest in Asia & emerging countries like Vietnam, etc but not the JUNK US T-bonds which one day will collapse.

0 ( +0 / -0 )

It would be disastrous to try to inflate prices as, along with domestic products, high value discretionary imports would fall and the price of necessary imports such as foodstuffs, energy, and raw materials would rise to domestic market prices. The net effect would be even a bigger trade imbalance causing a follow-on further rise in the yen.

0 ( +0 / -0 )

pushed the yen to levels he says do not reflect Japan’s economic reality

Definitely true, why does anyone want yen ... what value does it have other than that created by speculation ?

Would printing money really help or simply make a bad situation become even worse ?

0 ( +0 / -0 )

Japan has to increase its money supply! There is no other way for the yen to come down,

0 ( +0 / -0 )

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