business

Mrs Watanabe jumps on yen-selling bandwagon as tide turns

26 Comments
By Kentaro Sugiyama

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26 Comments
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Mrs. Watanabe is taking Mr. Abe for a ride.

6 ( +6 / -0 )

Push it to 120, anyone in export will love it, the rest will be squeezed, but strong exports means more jobs and more cash flowing into the country.

Those stuck in dead end jobs should have learned to diversify and supplement their income tough to be you.

-15 ( +2 / -17 )

Unless you are in the export industry like Abe, Hatoyama, Asou, and their cronies, Abenomics has been a financial disaster for you. And how can this export favorable devaluation continue when the population continues to decline and age? There are presently no workers who can fill the jobs needed in the export factories. And most of the factories have long been sent overseas. Immigration? Yeah, right. The typical Japanese demographic is not Mrs Watanabe, but a fixed income obachan living alone in a meager apartment somewhere in metro Nagoya. How has Abe's inflationary economic policy benefited her?

9 ( +11 / -2 )

Good article by Mr. Sugiyama . The currency dropped almost 10% in a month. Headline after headline of Japan Inc. buying everything not nailed down in the west and east. Do you think they have faith in their own economy, I think not. When those overseas profits come home, if they come home, do you think they will go into job creation here, haha I think not, again. If the yen tumbles any more it may become a cascade.

3 ( +4 / -1 )

[quote]How has Abe's inflationary economic policy benefited her?[/quote]

Indirectly, my friend. The profits from the export industry eventually find their way into other sectors thru spending...

-10 ( +2 / -12 )

Push it to 120, anyone in export will love it, the rest will be squeezed, but strong exports means more jobs and more cash flowing into the country.

the biggest problem is that japan is still importing massive amounts of gas and oil due to the shutdown of nuclear reactors. with a correspondingly massive trade deficit, this will cripple the economy.

2 ( +6 / -4 )

Indirectly, my friend. The profits from the export industry eventually find their way into other sectors thru spending...

Ahh, the myth of trickle down economics being regurgitated once again.

Unfortunately, all the evidence has shown that trickle down economics don't work. The people at the top just hoard the money without trickling any down.

10 ( +12 / -2 )

The recent wailing about the weakening yen illustrates the danger of putting all ones eggs in one basket. Inflation is no big deal for people who have diversified their savings into other currencies, as the rise in yen denominated prices is offset by the increasing value of those non-yen currency holdings when converted back into yen.

Whatever cards the politicians and central bankers deal out, adults just have to look at the cards objectively, and then play them.

For those people who have no savings and only have inflation to look forward to, getting a job with a company with a brightening future due to the weakening yen would be an option to explore.

If it pays to employ more workers, exporting firms will offer higher wages to attract labour. That's the theory anyway I guess, whether there is enough flexibility in the labour force I'm unsure (both from a cultural and regulatory point of view).

-3 ( +2 / -5 )

@ strangerland

Read fxgai's comment to see what I'm trying to get at...

-3 ( +2 / -5 )

Read fxgai's comment to see what I'm trying to get at...

I well understand the theories of trickle-down economics. But just like communism, they sound great on paper, but don't work in practice.

9 ( +10 / -1 )

finally the yen is returning to levels before the massive Feds QE, too bad if your iphone or imported bags are going up in price, buy a Japanese made one instead. if your sending yen back home then too bad also, all these things dont help Japan they do the opposite. Japan was built on exports not imports. yes energy imports will increase, but that why the N reactors will be switched back on, you can guarantee it. down thumb me all you like but these are the facts, live with them

-5 ( +2 / -7 )

Whoah guys, feel free to discuss, but my comment not about "trickle down economics". My comment was about people forgetting about the politicians and central bankers, and taking our future into our own hands. Our playbook is different when they are going for inflation and currency devaluation as opposed to deflation.

0 ( +2 / -2 )

"these things dont help Japan they do the opposite. Japan was built on exports not imports."

Weakened yen helps exports, no?

0 ( +2 / -2 )

Ahh, the myth of trickle down economics being regurgitated once again.

You are equating real profits to tax cuts in the trickle down theory. Tax cuts are supposed to help eventually the bottom feeders but not if the money isn't spent or invested.

1 ( +2 / -1 )

The notion that Mrs. Watanabe has tangible control or influence over exchange rate of the currency pair that she trades is exaggeration. Only large corporation that shift profits accord the borders or large institutional traders that trade extemely large contracts have such magnitude of influence.

2 ( +3 / -1 )

Eventually helping the bottom feeders is not the goal of most anyone who gets very far in business or politics. As in "at or above the level of city dogcatcher". Even applies to the Communists, after the purges.

0 ( +1 / -1 )

Most posters here seem to think we're still in the 70's and 80's where Japan was an export-driven economy. The Japanese manufacturing sector has long since been hollowed out. Sure, there are still pockets of manufacturing here and there, but virtually every industry has moved the bulk of their manufacturing abroad.

The only reason the weak yen benefits Japanese corporations right now is because repatriated profits appear as more in yen terms on their books.

6 ( +6 / -0 )

Tax cuts or a weakened yen, both are intended to put more money in the pockets of the big companies, which is then supposed to trickle down to the people at the bottom. Only it doesn't.

2 ( +4 / -2 )

Only it doesn't... Hmmm.

Cutting corporate tax rates would be considered a positive factor by business when considering operations in a given jurisdiction (see the recent hoopala in the US about "inversions" due to high corp tax rates in the US). As a result of the increased attractiveness of the jurisdiction for doing business, the demand for labour in that jurisdiction is likely to increase, and thus put upwards influence on wages. I don't know if this is exactly what is referred to by 'trickle down', but which part of the above theory doesn't work in practice?

-1 ( +1 / -2 )

Ahh, the myth of trickle down economics being regurgitated once again.

@Strangerland: are you saying that the ordinary population of a country has never become wealthy from an export-led economic expansion? Japan used to be the classic example of this, but has subsequently been joined by S. Korea and large parts of the rest of East Asia.

Also, the theory of "trickle down" economics has never been put forward by economists - I can only give you a wiki link because Google is full of left-wing criticisms of a theory that never existed. http://en.wikipedia.org/wiki/Trickle-down_economics

As for home FX trading, the Mrs, Watanabe's, are all playing a zero sum game, and they are playing against professional banks and trading houses. Overall they will lose, so I am sure that the idea of all these housewives generating extra income from home is a myth.

-3 ( +0 / -3 )

Ah-so,

You are not aware of economic history. Trickle-down economics was created in part by the economist Arthur Laffer during the 80s and applied to the Reagan economic policies. Few economists supported it, that is true, as it is a joke but some did. Laffer's theories have been used in Kansas recently with that states economy tanking horribly. It a failure that just does not seem to go away, why, because the true believers of free market libertarianism have to believe it all is true. Despite the fact of over 30 years of total failure in the real world. It is a triumph of ideology over reality. Abenomics is the another example of the reward the rich so they will trickle down to others approach. And once again it is failing for the 99% and benefiting the 1% (Abe, Aso and their buddies).

2 ( +3 / -1 )

The yen's is falling like a stone-overseas assets a must!

-1 ( +1 / -2 )

With the way things are going, if Mrs Watanabe doesn't play the game right, she will be walking the streets pretty soon!

0 ( +1 / -1 )

@Strangerland ....lol. That's like saying economic growth only benefits the companies: what good is having a good economy? Only the corporations benefit.

Giving the top tier more money via tax cuts hasn't tricked down, but we're not talking tax cuts here. We are talking about an increase in exports, manufacturing, and growth.

2 ( +3 / -1 )

They need to get the reactors back on stream, reduce the costs of imported fuels to run the conventional power stations, how come some of you seem to think a yen at 110 or even 120 to the $ is such a terrible thing, where were you all prior to 2008? Japan operated at those levels for some time previously.

Cheap yen may bring some manufacturers back to Japan, specially with trouble in china etc.

Get the manufacturing and export industries back on track get all the woman into the work force keep the old guys employed, bring in some skilled educated labour ( Note they sent lots of Brazilians home in 2008 ) restart the safest reactors and get this rickety old boat heading full steam ahead.

The economists think they understand economics and business how come they are not advising world leaders then and not teachering ?

Trickle down does not work, the greedy at the top simply pocket the money, however if they tried trickle up things maybe different. Put the money into the households that need it, to pay their mortages down, spend on items they want or need, meanwhile the money goes through the system giving the govt its %tage of tax and people in business make some profit , consumer debt decreases also.

The people at the top will still get their money once its been through everyone else's hands and everyone has had a turn with it.

-2 ( +0 / -2 )

Ahh, the myth of trickle down economics being regurgitated once again. Unfortunately, all the evidence has shown that trickle down economics don't work. The people at the top just hoard the money without trickling any down.

Seeing as government stimulus/spending bills are a form of trickle down economics and the Democratic party of the USA believes in them as a way to reduce unemployment and there is in fact research to support that they do in fact work....

1 ( +1 / -0 )

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