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Japan should push back against U.S. attack on yen policy, says Abe adviser

14 Comments
By Kaori Kaneko and Sumio Ito

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14 Comments
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I wish Nippon the best of luck in getting through the thick skull of Trump. If you succeed, you will find nothing of substance. You may be better off lobbying Invanka or Jared.

1 ( +3 / -2 )

Abe just can't tell America what to do.

2 ( +3 / -1 )

No way is Abe going to challenge Trump, and sabotage his free golfing holidays.

3 ( +5 / -2 )

It's pointless to try to explain financial concepts to DTJ. He's really not that smart.

But don't worry, Japan's not going to purposely sabotage its attempt to keep the Yen from rising. Abe may be many things, but he's not as dumb as DTJ. Abe knows that Japan's economy is headed for a disaster if it cannot increase inflation and GDP beyond their current rate.

The bad news is that Abenomics is not working. Radical labor reforms are needed - and no, asking businesses to voluntarily let employees off a couple of hours early one Friday each month is not enough. Immigration, too. I think eventually the government will come around to it. I just hope it will not be too late by then.

0 ( +4 / -4 )

“Japan has not intervened in the currency market under Abenomics, and Japan’s monetary policy is targeted strictly at domestic economic targets.”

I don't understand. Is this B.S. or not? I thought they did manipulate currency under "abenomics." Isn't this a lie?

5 ( +7 / -2 )

Large current account surpluses are the means of stealing other country's workers' jobs

Means? Result, maybe, but certainly not the means. As for the trade deficits the US runs, Japan is a minor factor. The deficit with China is nearly six times larger than that with Japan. The US deficit with the EU is twice as large as the deficit with Japan.

-1 ( +2 / -3 )

"...told Reuters in an interview that Tokyo should stress that Japan has a different currency policy from China."

So, Japan should lie again, in other words.

-2 ( +2 / -4 )

“Japan’s monetary policy is targeted strictly at domestic economic targets.”

No it isn't. They just say that to the American audience, but while monetary policy has not helped the Bank of Japan meet its inflation target, it has resulted in a much weaker yen than before Abenomics began.

0 ( +2 / -2 )

No it isn't. They just say that to the American audience, but while monetary policy has not helped the Bank of Japan meet its inflation target, it has resulted in a much weaker yen than before Abenomics began.

A weaker yen means more exports and more exports means more current account surplus. Right ?

0 ( +1 / -1 )

QQE is currency manipulation, full stop. Japan has a "different" currency policy from China, yes, but it does not mean that they are not using this method for their own well being.

Stop this QE mess, it is just putting a band aid on a stab wound. Just think of it like credit card debt, do you want to get into credit card debt? Obviously not, so countries shouldn't do this either. The euphemism of QQE is horrible, nothing qualitative and no ease about it, just makes the economy look good when someone is in power at the time, but the mess screws us

-1 ( +1 / -2 )

QQE is currency manipulation, full stop. yes its certainly been called that, US started the mess that is QE so it shouldnt come as a shock when the EU Japan China etc all do it to support their own economies.

-1 ( +1 / -2 )

It's pointless to try to explain financial concepts to DTJ. He's really not that smart.

I find comments like this to be hilarious. Abe and his ministers are hereditary politicians, most of whom have no professional experience in any industry outside politics. And those few who do come from Japan Inc, which has precious little understand financial concepts. Japan's economic success has (had) always depended on a weak yen and one-sided trade deals, and nothing else.

DJT has managed to bankrupt himself 5 times. Some would say that he must be stupid to have allowed so many bankruptcies to happen, but only those who know little about financial concepts. Despite these bankruptcies, DJT is now wealthier than he has ever been. This is not something which happens to stupid people, or everyone in America would be a millionaire.

Lastly, how likely is it that a stupid person can run a late campaign against a mainstream candidate, raise one-fifth as much money, and spend on-twentieth as much on politician advertising, and still win? If DJT is stupid, what does that make Hlllary for losing to him?

DJT is a person who gets what he wants, every time, without exception. He has proved his over and over again, and yet people still think he is stupid? If you are judging DJT by his tweets, and not by his record or his actions, you are less smart than you think he is.

Of course Japan is pushing down the yen for a trade advantage. Since 1995, Japan has implemented 18 "stimulus" programs, purportedly to encourage growth, but mainly to push down the yen. Another reason that Japan's debt is mostly domestically held is to keep bond rates low, and help keep the yen weak, and also why Japan has hoarded foreign currencies. If Japan were to keep a smaller reserve of foreign currency, it would necessarily strengthen the yen.

Japan's economy is not, and has never been competitive. And with Japanese companies run as they currently are, they cannot earn a profit without the advantage provided by a weak yen. Personally, as a business owner in Japan who is paid in dollars, I love when the yen is weak. But I was able to turn a profit even when the rate was 75 yen to the dollar.

-1 ( +1 / -2 )

drlucifer,

A weaker yen means more exports and more exports means more current account surplus. Right ?

Interestingly, Japan did not experience a commensurate increase in the volume of exports as a result of the 25-30% decline in the value of the yen against the dollar. However the dollars buying those exports when converted to yen are worth more yen than when the yen was stronger, so in yen terms the value of exports does increase, even if the volume has not.

I think the idea should be to increase the volume of exports though, rather than the number of zeros in yen-denominated bank accounts.

But in any case, yes an increase in exports (volume or value in yen terms) would effect the current account positively.

However Japan ostensibly pursued it's currency manipulation for the purpose of achieving an inflation target, not to improve its current account balance or weaken the yen. Those are just side effects, sheer coincidences. At least the side effects worked, even if the main intent of higher inflation wasn't achieved!

1 ( +1 / -0 )

A declining yen is bad for Japan's economy, as unbeknownst to apparently everyone who writes about business in Japan, Japan's is not an export economy. Only about 12% of Japan's GDP is from exports (compared to US's 17%) and a weak yen makes all those imports more expensive, especially energy which is usually paid for in dollars.

0 ( +0 / -0 )

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