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Yen eases on IMF intervention comments

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We need $1.00 to ¥100

I have About $200,000 I need to bring to Japan and this rate now is killing me. It is way out of line for this economy.

Print Yen!

-3 ( +5 / -7 )

Actually not a bad point there JapanGal, print yen and give it too everyone, will decrease the Yen mighty quick!

-2 ( +1 / -4 )

People like me working here in Japan want $1.00 to be as ¥60.

-3 ( +5 / -9 )

I need the Yen to stay strong until my (ever decreasing) bonus has been paid later this month.

2 ( +3 / -1 )

I feel your pain Japangal! Everytime I travel to Japan, my USD doesn't go very far. You've got $200k stuck in the US? You married or have a boyfriend? Nice legs!! ;) I hope you have it invested (post 2009) earning something until the exchange rate improves. Hopefully the US economy picks up, QE ends and US interest rates rise to curb inflation.

-1 ( +2 / -3 )

I have About $200,000 I need to bring to Japan and this rate now is killing me. It is way out of line for this economy.

Print Yen!

J-Gal, if the government prints money as you suggest, the resulting inflation will reduce what you can get with your yen by the same magnitude at which the exchange rate changes, and you won't be better off (and everyone who has savings in yen will also lose out).

What you want is for the US economy to develop so that the dollar naturally strengthens without the government printing more dollars and further debasing the currency. Maitai62 is correct that a raise in US interest rates would increase demand for dollars, meaning you'd get more yen for that money. (He's right about the 'nice legs' part too. ;)

Hopefully the race-to-the-bottom money-printing game will end soon.

0 ( +1 / -1 )

Printing Yen and giving it to Japanese won't necessarily help, it will affect inflation more than the exchange rate. Though inflation and exchange rate are somewhat connected, they are not the same thing, inflation can increase without affecting the exchange rate and vice versa, because inflation is mostly a domestic phenomenon and the exchange rate is established on the global markets.

To lower the value of the Yen, they could print Yen and, instead of giving it to the Japanese, start buying foreign stocks left and right. As this would create a large influx of Yen on the world markets, it should lower the Yen value (plus allow Japan to buy shares in profitable foreign ventures), and since most of that money would stay on the financial markets, the impact on inflation in the Japanese economy shouldn't be significant.

What is important though is "expectations". The Japanese central bank shouldn't make limited interventions in the shadows. It should outright announce that it is ready to print as much money as it can to obtain a certain value of the Yen (say 90 Yen to the dollar). This simple announcement, even without actual intervention, would likely be more effective than the interventions they did up to now, where speculators knew that they could just sit on their yen, wait until the central bank ran out of money for its intervention, then start trading as if nothing happened. If the central bank announces that it will enforce a price ceiling, then speculators know that the gig is up because they don't know when the policy will end and they will leave the Yen alone.

That is what the Swiss Central Bank did. They decided to announce that they would not tolerate a Swiss Franc above 0,83 Euro (rather they would not tolerate that an Euro be worth less than 1,20 Swiss Franc)... and the Franc has been holding at 0,83 Euro for 9 months now. Oh, and inflation in Switzerland hasn't exploded at all, it was at an annual rate of 0,5% in september 2011 before the peg... it's currently at -1% annually (yes, deflation).

If the central bank sends a strong signal, it can do it. If it does "limited interventions" then it is wasting money. It's all about expectations for speculators.

-1 ( +1 / -2 )

kchoze, deflation is more destructive than inflation. More yen in circulation means the yen will go down. The high yen more than anything is destroying Japans economy.

1 ( +2 / -1 )

Bravo IMF!!

It is high time that there was some support from international financial agencies for action on the part of governments against the speculator cretins in NYC and London.

There are growing fears about a Greek exit from the eurozone amid a wave of anti-austerity sentiment in the debt-ridden nation, a result that could spell disaster for Europe and the world economy.

In light of Cameroon's recent statements threatening to veto a move by the EU to establish a banking union as part of the efforts aimed at facilitating greater political integration in the Euro zone, it is clear that there is a divide and conquer strategy component of the policy of the conservative UK politicos and their finance sector backers.

The crisis in Europe is what is creating the conditions that enable speculators to exploit disequilibrium in global markets, and to exert pressure on national finances by affecting bond markets and borrowing costs.

The fact that Japan presents a so-called safe haven for them to park their billions temporarily while they attempt to bring about the conditions that ensure for their profitability--even at the expense of the public interest--is something that governments and regulatory agencies should have ample authority and adequate means to quash.

1 ( +1 / -0 )

^^^^^^ well said ubikwit you should be president.

0 ( +0 / -0 )

UBIKWIT has hit it right on..There is no way the YEN should be so strong.. I base this on the Debt Japan has. When are these Clowns going to start using with common sense.. Maybe never..

2 ( +2 / -0 )

70 trillion yen asset-purchase program.

Wow, hopefully it works. While Japanese business may enjoy weaker yen for exporting, Japanese consumers will get hit with a hyper inflation.

-1 ( +1 / -2 )

Wow, hopefully it works. While Japanese business may enjoy weaker yen for exporting, Japanese consumers will get hit with a hyper inflation.

Do you even know what "hyper inflation" is globalwatcher?

1 ( +3 / -2 )

high and usually accelerating inflation

No wonder you use it so casually and often. sigh.

1 ( +3 / -2 )

@canadianbento that is an excellent observation. the contrast between the soaring yen on the one hand, and the threat of being downgraded by the credit ratings agencies points to astartling contradiction.

@exportexpert

it's good to have such a forum to discuss this issues. cheers.

1 ( +1 / -0 )

No wonder you use it so casually and often. sigh.

@nigelboy, I have good reason to worry, however, it is somewhat " arbitrary" depends on each individual's view and judgement.

There have been 21 countries that experienced "Hyperinflation" In the last 25 Years. Most of them are all related to currency and debt issues.

0 ( +0 / -0 )

Let's get some perspective here. Japan ran a trade deficit last year for the first time in decades, but this may have been a one-off because of earthquake effects (Japanese production was hit, and nuclear power switch-offs increased imports of fuel). Ignoring such one-offs, Japan still exports at least as much as it imports, and this seems inappropriate for a wealthy country with an increasing proportion of retirees. Why should Japan be able to run continuing surpluses all the time when poorer countries need them much more? As for Japan's debt position (canadianbento), the debt is almost all yen-denominated and held by Japanese people, so the value of the yen is of limited relevance to it (and vice versa). Japan still holds a large net surplus of foreign assets.

0 ( +0 / -0 )

Wow, hopefully it works. While Japanese business may enjoy weaker yen for exporting, Japanese consumers will get hit with a hyper inflation.

Please inform yourself of what Switzerland did to bring down the value of its money and the impacts on inflation. Over the last few years, the Swiss central bank printed as much as 30% of GDP to intervene on currency markets and it has announced it will print as much money as it can to maintain the Swiss Franc below 0,83 Euro. Has Switzerland suffered from hyper-inflation? Not at all, their inflation rate is currently negative.

The reason for this is simple, currency traders are holding Japanese Yen and Swiss Francs as safe assets, they are not buying the currency to invest in those countries nor to buy stuff in them. Because of that, this money is not inflating the domestic economies at all because it is not circulating in the economy.

0 ( +0 / -0 )

Why should Japan be able to run continuing surpluses all the time when poorer countries need them much more?

that sounds like someone high on their soapbox, as my grandparents generation would say.

what is the logic for making such a sentimentalistic appeal? you sound like thomas and his complaints about german manufacturing. in a free market economy, competition is the condition of the possibility for the functioning of the market mechanism.

obviously germany and japan manufacture superior goods that generate high demand, so they have leading economies.

and what is this mumbo jumbo about debt? was that a computer model generated hedge (hahaha)?

the finance cretins can't have their cake and eat it too. what motivates the speculators to park their billions in ill-gotten gain in white collar crime proceeds in so-called safe havens while attacking the safe haven at the same time through their ratings agency cohorts? from a common sense standpoint it sounds ridiculous to say that the value of the yen and the fact that japanese debt is all-yen denominated should have no connection.

it sounds like we have regulation of the financiers, for the financiers, and by the financiers.

most of the content you list seems to indicate that you are plotting some strategy against the japanese economy, and its large net surplus of foreign assets. is that why its a safe haven? get back those foreign assets!!

0 ( +0 / -0 )

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