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Yen in sweet spot for economy, but U.S. watching

By William Mallard

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“All it might take is a small event to trigger a catastrophic shift in the perception of Japan,” said Neal Gilbert, market strategist at Gain Capital in Grand Rapids, Michigan.

Nice to see they could get a recognised expert on this stuff.

however have to agree that Japan is skating on thin ice with its massive deficit, balance of payments going the wrong way and huge money printing exercise underway. and no 3rd arrow.

4 ( +5 / -1 )

So I assume if it stays below its actual value long enough it will be ok like with China's currency manipulation that no one did anything about for the last thirty years. This talk about Japan's currency seems to be somewhat hypocritical, would we say????? Why did no one do anything with China all these years and still today with their undervalued currency, but suddenly there has been this rage over Japan's. I cannot understand why China gets away with just about everything and anything and not just speaking of this one issue of course!!!!!

7 ( +7 / -0 )

Everyone will benefit from Abenomics if it works (big IF). A reved up Japanese economy will start consuming lots more stuff from all over the world. Give it a little time.

-2 ( +3 / -5 )

US is the biggest currency manipulator in the history of the world closely chased by china, japan is in distant third place, The americans don't like Japanese currency manipulation but its ok for them to do it?

3 ( +5 / -2 )

My opinion is that the yen and dollar exhange rate is balanced now. It should stay like this and will be Ok for the US.

-1 ( +1 / -2 )

Any political issue can affect the yen-U.S. dollar market. Exchange rates, like the stock exchanges to which they are closely tied, are subject to the changes in the economic winds.

-1 ( +1 / -2 )

Bumper profits due to currency devaluation are only mirages to fool those who refuse to see where the real problems lie and it is all with the Abe government.

0 ( +0 / -0 )

I'm happy the Yen is around the 170 per Pound Sterling. Makes buying travel money that much more reasonable for my hols ^_^

2 ( +3 / -1 )

Not good at all for me, an American in Japan.

-1 ( +3 / -4 )

We can see what side this article is going to take right from the headline: more knee-jerk Abe support.

Falling by "almost a fifth" since Abe took power? That's a very sneaky way to frame a yen decline that is in fact almost twice that large -- the fall began before Abe got elected, as polls showed that his LDP was a lock to come back into power. After being in a very consistent 76-82 range for almost two years, the yen plunged just before the election. Abe and the LDP must take the blame for the entire fall, not just the half that occurred after his policies came into effect.

The yen is hardly in a "sweet spot" depending on where you're coming from. If you've saved lots of money over the past 5-10 years, Abe's policies have ruined you. If you're a forward-looking, internationally-minded employer looking to attract talent from all over the world, you probably had mugh higher-quality applicants in 2010-2012 than you had last year because Japanese salaries, and the savings that they generate, went so much further.

Abe's reckless spending has been a bonanza for exporters and companies connected to the LDP and its spending spigot. For Taro Salaryman and a nation of diligent savers -- particularly those whose working lives are less than half over -- these policies have bruoght nothing but further belt-tightening and more worries about the future.

Still, current and former Japanese officials knowledgeable about currency diplomacy say a yen fall to 110 to the dollar might not raise the heat on Tokyo - that the threshold might be more like 120-130 yen.

Translation: "How much more of the younger generation's hard-earnde wealth can we loot before the pitchforks and torches come out? Probably even more than we had first envisioned!"

3 ( +6 / -3 )

Export is good for any economy, cheaper yen means more export, more manufacturing, more investment from companies, more jobs. Some of you forget where the $ yen sat prior to 2008, no one was moaning and complaining about it then so these empty cries now are pointless and whinging for the sake of not knowing the real benefit.

The yen is merely returning to where it should have been, if the US hadn't ruined the worlds economy we wouldn't even have seen this thread.

2 ( +4 / -2 )

they love currency manipulating, don't they? Like they manipulate just about everything else.

-3 ( +0 / -3 )

This Abenomics is essentially currency manipulation. Old trick. The US' been doing that too.

3 ( +3 / -0 )

Good news for domestic production. Destructive deflation is worse than inflation. The world wide depression in the 30's was about deflation. So as domestic production is increased more good jobs will be created. This will even help the American troops as they can buy fresh food for a reasonable price "in town". So this is a win win with the exception of people who want to sell yen.

-2 ( +1 / -3 )

YuriOtani: So as domestic production is increased more good jobs will be created.

I really hope that this co-relation between inflation and production increase is bullet proof.

I understand that Brazil and Japan are totally different, there is no way to compare both economy but we had staginflation: the worst of both worlds...

0 ( +1 / -1 )

xandirules, it is not the inflation but the too strong yen. Japanese production became too expensive and was being phased out to buying cheap imports. It was the loss of jobs that cause consumption to fall and this put more people out of jobs. It was a downward cycle for Japan. The increased price of energy was expected and can not be helped. Another benefit is when the companies bring home profit from abroad they get more yen. It is not easy to stage an economical recovery for Japan but the old ways were not working.

0 ( +0 / -0 )

It's time to see products with Made in Japan recognized as top quality products. I'm not talking rubber sandals or middle-tech manufacturing like tvs and smartphones. We need to see more products recognized by the world as being uniquely Japanese and high tech. Medical devices and instruments to name a few, nanotech, and microtech. Problem is Japan needs to be careful in how they release and patent their secret tech, otherwise the two neighbors will be copying and marketing their products as their own innovations with the allure that it is profitable due to cheaper materials and products that are almost as good.

Hneck, Japan's cellphones of the past were far more interesting, unique, and novelty to today's "smartphones".

0 ( +1 / -1 )

The increased price of energy was expected and can not be helped.

Japan is 70% reliant on energy import. It is heavily depending on imported raw materials too. Increasing price of energy and materials will make Japanese goods more expensive. Low yen is not everything for Japan export competitiveness. Japan can be helped by herself for diversifying nuclear energy, solar energy, wind energy and hydro power energy for less dependent on imported energy.

It is not easy to stage an economical recovery for Japan but the old ways were not working.

In fact Japan is still doing old ways of selling TV, Cars and Cameras like good old days of 70s and 80s. Even the prices are gettng cheaper, they will not be high demand like old days. No wonder Sony and Panasonic credit rating have been downgraded. Japan needed to be innovative with new products like Iphone, Ipad and Imax.

-1 ( +1 / -2 )

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