politics

U.S. pressures Japan not to devalue yen

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A stronger yen hurts Japanese exporters, a key driver of the world’s third largest economy, by making their products relatively more expensive overseas.

No, stronger yen hurts Japanese exporters not by making their products relatively more expensive overseas but by forex loss resulting from the appreciation of the yen. Cheap yen in the last few years didn’t make the Japanese products cheaper in the US market. The exporters’ profits came from exchange gains. The U.S. blames its own huge trade deficit to the monetary policies of major trading partners. Higher yen won’t reduce America’s trade deficit as we can see what happened after the Plaza Accord of 1985. They do this when the election is approaching.

9 ( +11 / -2 )

Thumbs up to you, Seihari.... an intelligent voice shines like a gleaming beacon in these threads.

It is true isn't it everyone? One would think that currency values make a big difference, and maybe they do in the long run, but in the 24 hour news cycle world we live in today? Forget it. Even low fuel prices took something like six months to show up in electric bills. If prices DO change, they only do so because of middle men and speculators taking a piece of the pie.

Bah. As if more people buy Toyota vehicles because the price changes a few hundred dollars during a year. Who does that? People look at options, loan rates, subsidies. Doesn't everybody?

Seihari is right. Must be an election year, the US is sticking it to Japan again.

-1 ( +7 / -8 )

All central banks -- including the Federal Reserve -- are currency manipulators. There's not a single central bank in the world that doesn't set fiscal policies to support its own currency.

12 ( +12 / -0 )

Watcha gonna do about it???? We own a trillion dollars of your debt. We could just stop buying, or worse start selling. Japanese analysts say that recent yen fluctuations have more to do with the effects of Abenomic policies to stop deflation than currency manipulation.

3 ( +9 / -6 )

What does USA expect from Japan to do when Yen goes rocket high by SPECULATIONS?What Japan supposed to do when export is badly damaged by these SPECULATIONS?Japan has to intervene in a certain time strongly,otherwise export will go with the wind.

-4 ( +8 / -12 )

Imports exceeding exports in this 'Export-Oriented' country and running trade deficit for years...why do they need weak yen? Yen is likely to remain stable and this US 'pressure' is to please emerging markets who are greatly affected by such exchange manipulation by G7

-1 ( +1 / -2 )

The Ameeicans are the biggest manipulators the world has ever seen.......sheesh!

4 ( +8 / -4 )

U.S. pressures Japan not to devalue yen

Has the US pressured China for it's low exchange rate ?

Yen 160 = £ 1 (at time of posting)

Yen 110 = $ 1 US

2004 when i was in Japan it was Yen 186 = £ 1

The strength of the Yen has increased by 14% in 12 years making visits to Japan more expensive. :(

.

5 ( +7 / -2 )

lazy government and lazy old big companies...the imagination was wrung out of them after 40 years climbing the management/political ladder. what else can they think of?

3 ( +3 / -0 )

Japan should devalue its currency as soon as possible... before their exports collapse

-2 ( +4 / -6 )

so Germany all happy because it hides behind the Euros weakness, Chinas happy because it continuously manipulates it currency and the biggest manipulator of them all the Feds!! the last intervention by Japan was 2011 and now Japan is talking tough about intervening again they all cry foul, F hypocrites the lot of them. Japan has every right to do what it sees fit with their currency which it owns. and as Seiharinokaze has just said foreign monetary policies aren't the cause of Americas $500billion+/yr trade deficit, its addiction to spending money it doesn't have and fighting wars it cant afford is where the problem lies.

3 ( +4 / -1 )

2 Options : 1.) Japan inc trim for fitness and get more efficient to face global competition. -> Arrow no 3.

2.) Easy option devaluation the yen make export "cheaper". Since Japan has no natural resources raw material has to be imported. Imports get more expensive hence production cost go up offsetting the benefit a low currency has on exports. Option no 2 comes also with a big price tag for Japanese customers in form of price increase. Earlier or later currency and /or domestic economy collapses.

-1 ( +1 / -2 )

Japan does not need currency manipulation.

What it needs is innovative and competitive products. If Japanese companies actually produced things that people wanted, they might sell something for a change.

Instead we have companies like sony producing a million versions of the same product with no brand separation at prices higher than the competition (samsung et all) who produce better products for lower cost.

Fix your problems at home Japan! We used to be a leader in manufacturing, what happened? You cannot blame everything on pricing. Even at the worst of times in recent history, the yen has only fluctuated to 15%ish below or above par with the USD.

6 ( +8 / -2 )

Since Japan has no natural resources raw material has to be imported. Imports get more expensive hence, production cost go up offsetting the benefit a low currency has on exports.

but you forgot labour the first or second highest cost of manufacturers in Japan and around the world. a weaker yen makes Japanese labour much cheaper than say American or German workers which is why Germany/America don't like a weak yen and are the main complainers of Japan proposed currency intervention.

0 ( +4 / -4 )

inb4 some American says something like "It's not currency manipulation because we're just trying to create a stable economy, unlike other countries who try to get an economic advantage. There is a difference!".

0 ( +2 / -2 )

First off.... since the USA is the largest importer of goods from Japan, China, S. Korea, Taiwan, Malaysia, Indonesia and Vietnam... guess what, we should have more say than anyone else regarding Currency rates. We've sucked up exports from Asia for 50 years and we continue to do so.... we've run trade deficits with Asia forever. Yes, we have benefited with inexpensive imports, but we lost a lot of jobs too. So if you want to cry about how we dictate things.... you try running a trade deficit for that long and see how far you get. Second.... every Asian country wants a weak currency... we need to step in because there is no doubt that China, S. Korea, Japan and Taiwan will not come to terms on which country should be at what level. So many of you talk, moan and groan but you really have no clue on finance, trade, economics and fiscal policy. On to the Yen, I think, considering Japan's Govt Debt, Demographics, and dwindling economic power due to more competition, that the Yen should be around Y150 to the Dollar... but try and get that by S. Korea and China.

0 ( +4 / -4 )

Nowadays, Japanese policy makers intervene in more covert ways. The mercantilist mindset is alive and well, but they're forced, by virtue of their membership in the 'respectable club', into adopting more devious strategies to achieve a similar effect to what they used to do in more brazen ways. No doubt, the screams of the big exporters, adversely affected by yen appreciation, are real. No less real though has been the pain that an engineered weaker yen has imposed on Japanese consumers denied cheaper imports, and on foreign manufacturers who've watched helplessly as Japanese exporters have eroded their market shares, both in their own comparatively freer domestic markets and also internationally. If putting Japan on notice forces it to dial down its one sided support for a weaker currency and helps its policy making elite arrive at a more realistic and sympathetic understanding of the harm they've been causing others, then well and good.

0 ( +2 / -2 )

Double the minimum wage and that will stop the surge plus it will put some cash in the local emconey and it just might push inflation into positive.

2 ( +4 / -2 )

And that new minimum wage will kill a few million jobs, pushing the already marginal earners into homelessness along with a net disasterous economic effect.

Come on Japan! Weaken that yen so I can get a better rate on my dollars! Do it now! I want more yen. It's all about me!

-4 ( +1 / -5 )

In my fav onsen the other day and there were more foreigners in the bath than Japanese! Keep the yen high,it won't deter quality tourists! Japan could very well do with much more investment into upgrading and deregulating this area more to provide work for the locals.....

-1 ( +2 / -3 )

Domtoidi: That what Greenspan has been perching for 40 years and guest what. He has amitted that he was totally wrong. Greenspan gave the keys to world manufacturing to China and South Korea and they not going to give them up. Japan can afford to double the minimum along with devaluing the Yen. This will not cause unemployment it will create jobs. Look Japan is rich, very very rich. It about time they started to share the profit with doubling the minimum wage. The day of 30 % mark up are over if you have not notice. Companies have to except this as a fact and lower the their margine on good. They can still make a profit on 15% but will not except the fact that margin have change. We are at the end of this era. Middle manage will be the target over the next 50 years. You will see their wages drop and you will see production job wages go up. Because we not going to exist if they keep their mind set on 30%

1 ( +2 / -1 )

guess what, we should have more say than anyone else regarding Currency rates. We've sucked up exports from Asia for 50 years and we continue to do so.... we've run trade deficits with Asia forever. Yes, we have benefited with inexpensive imports, but we lost a lot of jobs too. you make it sound like America is the only ones doing it tough, Japan has lost about 8million manufacturing jobs to China and cheaper Asian countries over the last 20+yrs. the only reason America can run a huge trade deficit for so long is because they're the reserve currency and countries like China/Japan continue to buy their debt. America had is say about Japans currency in 1985 with the "plaza accord" did that fix its deficit problem. No! America has no right to dictate to any currency what they can and can't do, as Joe said every central bank in the world sets its fiscal policies to support its own currency. The Feds probably the most of them all. America is addicted to cheap imports and unless they can get Americans to work at Asian countries low wages, will continue to do so.

0 ( +3 / -3 )

Here's an interesting revelation about the topic:

http://www.myswingjapan.com/bakajt/image.png

1 ( +1 / -0 )

All central banks manipulate currency. Most central banks manipulate due to foreign exchange since they depend so much on exports. The U.S. is an anomaly since it manipulates mostly due to domestic economy (e.g. to boost spending or to slow inflation, etc). The U.S economy is somewhat insulated from foreign exchange - most of its economy relies on domestic spending, instead of foreign exchange (which mostly on manufacturing imported goods) that affect multinational corporations balance sheets (aka stock market).

0 ( +0 / -0 )

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