Photo: iStock/fastido
business

Japan 'on standby' to take all possible steps amid yen decline

46 Comments

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

© KYODO

©2024 GPlusMedia Inc.

46 Comments
Login to comment

How about raising interest rates, which have been at zero for over 30 years?

15 ( +22 / -7 )

30 years, you say? OK.

You can't just raise Interest rates without letting JBGs trade completely freely.

My guess is they intervene tomorrow night thru the FRB going into the long weekend.

3 ( +6 / -3 )

The article mentions about the gap between the US dollar and the Yen,but in fact the Yen is getting weaker even against the Euro.

Now 1 euro is worth 160 yen and I remember when there was a parity between such values.

Japan is ruled by old narrow minded protectionist politicians that are immobile to all the problems that are happening to the Japanese economy.

This country need to get rid of these LPD cronies and have a fresh political agenda.

-4 ( +13 / -17 )

Japan 'on standby'

The Japan Inc./LDP combine: 'on standby' since 1993.

While monied rentier interests rake in windfall profits from monetary easing and exporter profiteering.

9 ( +15 / -6 )

Japan can choose one, and only one option: it can either choose to save its bond markets, and thus its ability to finance deficit spending as its spending requirements begin to explode, or it can choose to save its currency.

Japan will choose the former. "Interventions" in the currency markets will have diminishing returns. See: JPY @ 151 plus to USD 1. And rising...

-6 ( +8 / -14 )

....and will be back to the 149-150 range next week.

2 ( +5 / -3 )

A weak currency is simply a reflection of economy. Aging, shrinking population, famous brands long gone, innovations in the pipeline none. And higher interest rates? Beware, now a double punch inflation would economically strangle everything and everyone, from the few babies to the 110 yrs. old seniors, and all working overtimers and parttimers in between. If you really can't wait and quickly need it, Japanese banks offer dollar account investments, a short time freezer, 6 month at 9%.

-2 ( +7 / -9 )

BitoToday  05:10 pm JST

Japan can choose one, and only one option: it can either choose to save its bond markets, and thus its ability to finance deficit spending as its spending requirements begin to explode, or it can choose to save its currency.

It will probably try a middle of the road which will not work.

Kuroda created a total mess and even though Ueda is much more able and skillful it is probably too late to avoid a major crisis.

2 ( +4 / -2 )

How do you say grab your ankles in Japanese?

-7 ( +3 / -10 )

The yen doesn’t have any real value anymore, as is reflected in the stock market. Japan doesn’t have an economy that foreign investors want to participate in. They are investing in countries with strong economies like China. Japan doesn’t have the manufacturing strength it has twenty or thirty years ago. Even the bigger Japanese companies are manufacturing in other countries these days. Japan needs to stop playing the stock market and rebuild its domestic economy. Japanese people are going broke while the government plays pachinko with their money.

-7 ( +10 / -17 )

The world seems to have finally given up on Japan and it's paying for it!

-11 ( +7 / -18 )

History repeating itself. With a far weaker economy and larger asset bubble, this will be one for the textbooks

-4 ( +4 / -8 )

Kuroda created a total mess 

Lowest borrowing costs around, low inflation, record-high corporate profits, 2.5 percent jobless rates, a stock market that became the darling of global investors. Yeah, if you say so.

A weak currency is simply a reflection of economy.... 

The yen's current weakness is overwhelmingly due to the interest rate differential between Japan, which is staying the course on its monetary policy, and its peers, which were forced to hike their interest rates to deal with their much higher inflation rates.

It's time for Japan to rise up and make It's currency strong again

That's a decision for Jerome Powell. Once he brings US rates down, we should see more sane forex rates.

-2 ( +2 / -4 )

I said twice in the past that the perfect balance is 150 JPN / 1 USD, and will stay there.

-10 ( +0 / -10 )

Back in 1995, when Japan intervened to try to stem the fall of the yen, the BOJ's prime interest rate was at 2.5%. Japan's currently at zero percent (actually, isn't it -.05%?), which gives them very little leverage.

I'd like to see them raise it just a bit to help ease the inflation we've all been experiencing (even though the LDP has been wanting inflation for a long time).

6 ( +7 / -1 )

The exchange rate will hit 200 yen next year.

-9 ( +7 / -16 )

Personally I am rather enjoying the weak Yen. Now bring back GTT and I will be in heaven.

-6 ( +0 / -6 )

Exchange rate with the UK pound is currently 183 Yen to the Pound... good news for me buying Yen for my holibags :)

-3 ( +2 / -5 )

Tourists say yay, English teachers cry.

3 ( +8 / -5 )

Without Kuroda, Japan would never have been able to borrow to the extent that it did, leading it to become the second most indebted country in the world in terms of debt to GDP, just after... Venezuela!

Do you have any suggestions on how Japan can escape the deep debt trap it finds itself in without either plunging into a severe depression or facing high inflation? I can't envision any feasible solutions.

Under Kuroda's leadership, Japan simply bought time by deferring crucial structural reforms and keeping zombie companies afloat, among other issues.

2 ( +4 / -2 )

Raising interest rates is going to expose all the zombie companies limping along.

3 ( +5 / -2 )

JeffLee

Kuroda created a total mess 

Lowest borrowing costs around, low inflation, record-high corporate profits, 2.5 percent jobless rates, a stock market that became the darling of global investors. Yeah, if you say so.

Without Kuroda, Japan would never have been able to borrow to the extent that it did, leading it to become the second most indebted country in the world in terms of debt to GDP, just after Venezuela.

Do you have any suggestions on how Japan can escape the deep debt trap it finds itself in without either plunging into a severe depression or facing high inflation? I can't envision any feasible solutions.

Under Kuroda's leadership, Japan simply bought time by deferring crucial structural reforms and keeping zombie companies afloat, among other issues.

1 ( +3 / -2 )

Japan release press release they are about to start currency manipulation. Just giving your money away to traders.

2 ( +4 / -2 )

Exchange rate with the UK pound is currently 183 Yen to the Pound... good news for me buying Yen for my holibags :)

That's nothing to shout about it.

It used to be 255 yen to a pound a few years ago!

1 ( +5 / -4 )

Most people in Japan have almost no way to invest their money for gain. Interest on bank deposits is essentially zero, and stocks and bonds are not really available to average people. Property (land) is a viable investment for those who can afford it in some areas of the country. Essentially there is no hedge against inflation. The Japanese Yen is essentially controlled by outside forces such as trade balances and foreign (US) interest rates. Japan needs to change this or the economy will go the way of the birthrate.

-3 ( +3 / -6 )

Yeah agree, currency manipulation incoming.

-2 ( +2 / -4 )

Does this mean interest rates are going up?

1 ( +2 / -1 )

For Japan's residents to travel now, you've gotta be super rich to travel internationally now.

-4 ( +1 / -5 )

@Randy Daytona : er.. No. The biggest contributing factor is that 10y JGBs are effectively 'capped' at 1% and 10y USTs are close to 5%.

@Lindsay : Then you don't understand why the stock market IS riding a wave. It's so cheap FOR foreign investors to buy into.

Simple economics for the ALTs here.

-1 ( +1 / -2 )

The warning had been signalled about the currency, that's kept it below 151.50 this afternoon. Intervention will occur (even if they say they haven't) at the most unexpected time.. I don't think they'll want to spook the domestic market tomorrow by doing it tonight, but tomorrow night going into a long weekend here and letting the market digest it is very possible.

1 ( +2 / -1 )

I read an article a few weeks ago. It was stating that the IMF felt that the YEN was actually undervalued and should be around ¥180 and if Japan intervened to lower the YEN, then they should be considered “currency manipulators”. Anyone else think this way?

-5 ( +0 / -5 )

For several decades, Japan's economy has been stagnant due to the actions of stubborn policy makers. Too fearful to adjust. Japan's economy is losing ground to others. 

These fearful, outdated policymakers will only exacerbate the situation by defying market forces.

-4 ( +2 / -6 )

For Japan's residents to travel now, you've gotta be super rich to travel internationally now.

I remember the kids at university used to travel all over the place. Theyd work their asses off sure but then they would travel to Thailand, Europe, Australia etc. Now my students save money to pay for groceries.

-3 ( +4 / -7 )

Japan needs to do something meaningful instead of these wasteful yen manipulations.

Reform or perish.

-3 ( +2 / -5 )

Japan have just been buying time delaying what is to come. No easy solution to this, either way the average person making their wages in yen will have a bad time.

-4 ( +0 / -4 )

I think the currency will only be saved when the US and Europe lower their own interest rates when the economy falters.

1 ( +2 / -1 )

How about leaving it where it is? The rate is supposed to be about what it is.

0 ( +3 / -3 )

During my time in Japan in the 1990s the US/Yen exchange rate varied from the mid 80s to 160. People and companies can adapt. It is all about the underlying state of the Japanese economy which is 'meh' at best.

1 ( +2 / -1 )

On our last holiday in Japan we got 148 Yen to the pound I recently locked in a rate of 186.5 Yen on my Global money account. Even if I could've got more by waiting I'm still happy with the rate I locked in.

Being a pensioner all my pensions including the state old age pension went up by 10.1% in April and it's likely to go up by 7.8 to 8.5% next April. Prices have gone a bit mad especially fuel I'm paying 274 Yen per litre and electricity is 60.5 Yen a Kwh.

I do feel that Japan's politician's should take their collective heads out of the sand and be brave.

-2 ( +0 / -2 )

well 155 sounds better seeing japanbis still using faxes to communicate and when that was popular the yen was 155 to the dollar so explains everything what’s wrong. And the politicians who have no cares or interests in the general public will go in about their day visiting shrines and giving speeches to statues in parks while people just walk by looking at their phones and bumping into each other.

-2 ( +1 / -3 )

@Rakuraku

Do you have any suggestions on how Japan can escape the deep debt trap

Why would I? There is no such thing as a "debt trap" in Japan's case. Exactly what strains is Japan's fiscal debt putting on the economy? Japan's economy has fared relatively well during and after covid. not great, but better than most of the major economies. Take a look at the current state of China and Germany, for example. Yikes!

Under Kuroda's leadership, Japan simply bought time by deferring crucial structural reforms and keeping zombie companies afloat, among other issues.

Structural reforms weren't in Kuroda's mandate. Monetary policy is about interest rates and inflation.

2 ( +2 / -0 )

Clearly @JeffLee, the only other person with any true understanding of the situation here.

1 ( +1 / -0 )

oh look at the rate this morning!

0 ( +0 / -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