What's up with the value of the YEN?

[Christoff]

According to yahoo finance max chart (10 years) the dollar has never been this strong against the $

[FG Lurker]

According to yahoo finance max chart (10 years) the dollar has never been this strong against the $

It has, but the chart doesn't go back long enough to see it.

In 1985 many nations signed the "Plaza Accord" which dramatically devalued the US$. The yen was around 240/dollar at this time and over the next year the yen rose to ~130/dollar. It kept going, and in April '95 it hit 79.70.

At this point the Japanese government finally figured out that this was wreaking massive havoc on the Japanese economy and the BOJ stepped in to intervene and restore some balance to the rates.

There is no solid reason for the yen to be stronger than the US$. There is nothing going on in the US right now that isn't the same or worse in Japan, and the long term future of the US is a *lot* brighter than the long term future of Japan. Yet the yen keeps drifting higher...

[AlbertSiegel]

CRAP! I reallay did not think it would go this high. The dollar is just so bad... looks like confederate money might be worth more soon...

[Number11]

"There is nothing going on in the US right now that isn't the same or worse in Japan, and the long term future of the US is a *lot* brighter than the long term future of Japan. Yet the yen keeps drifting higher..." --- FG Lurker

Spoken like a true Kenysian. The irony of the quotation in your signature is that Keynes and his banker disciples never abide by that concept. They were duplicitous bastards and Keyne's Bretton Woods was the first link in the chain of events that are the evil we now call "monetary policy."

[Greji]

"and the long term future of the US is a *lot* brighter than the long term future of Japan."

Lilly?

And the famous LL, errr RR man returns! Longtime no see Rob. How goes it?

[Christoff]

wait, what? robpongi is still alive? I heard he died in Fuchu Prison

[FG Lurker]

The strong yen is rewarding companies like Sony that have offshored a high percentage of their manufacturing (and therefore jobs) and is heavily penalizing companies like Toyota that have kept a lot of jobs in Japan. What sort of fucked up government wants to encourage more and more offshoring of jobs!? I guess this somehow fits into the DPJ's stated goal of focusing on people more than businesses?

[FG Lurker]

Nah, it was just a couple years of hard labor.

Good to see ya back Rob, I've missed your regular meltdowns.

[Christoff]

Nah, it was just a couple years of hard labor.

But, you know, it's not gay if you're in prison!

http://www.instantrimshot.com

I think that depends if your on the giving or receiving end of the transaction

[cujojpn]

Sign of hope!? Yen is now at 90.25 JPY / USD I think it will hit low 91 by end day here in the states.

[FG Lurker]

Toyota exec fears yen strength, not recall cost
AP via Mainichi Daily News, December 5, 2009

The big danger for Toyota isn't the cost of the massive U.S. recall to replace gas pedals, but instead shrinking income from the surging yen, a top executive said Friday.

[...]

Funo, in contrast, was visibly alarmed by the recent surge of the yen. The dollar fell to a 14-year low of 84.81 last week, although it has recovered moderately to about 88 yen.

He said Toyota faced tough times when the dollar was trading at about 90 yen, but things were far worse at near 85 yen.

[...]

Funo acknowledged there was little Toyota could do but cut costs and try to build cars where they are sold to fight the damage of a soaring yen.

(Full Story)

Thankfully the yen has weakened considerably from its 84.8 peak, and it seems the DPJ has finally managed to figure out that a strong yen isn't "helpful to consumers" if there are no fucking jobs because all the manufacturing & export businesses are going bust or offshoring all their jobs.

For now at least it looks like the momentum is towards yen weakening and it doesn't come a moment too soon! At 85/dollar I was starting to bleed red ink again, something I haven't done since March and not something I want to repeat. Perhaps I can rebuild some of the capital I had to eat through in the 5 months to March '09... (Hey, I can dream, right!?)

[GuyJean]

.. the yen has weakened considerably from its 84.8 peak..

Yeah, when I saw 86 I bought dollars and did my early holiday shopping at Amazon-com]last plucking[/URL] wasn't so bad.. )

GJ

[nottu]

[2triky]

Yen may hit 74 against dollar by 2011: forex strategist
Bloomberg

The yen may rise to a record 74 per dollar by 2011 because the Bank of Japan hasn't done enough to combat deflation, said Eishi Wakabayashi, a strategist who forecast the currency's surge to an all-time high in April 1995.

Wakabayashi said the BOJ should re-think its "fundamentalist" stance on combating inflation while neglecting measures to stimulate the economy.

Prime Minister Yukio Hatoyama's government should revise the central bank's by-laws to give it a mandate to stabilize prices and expand employment, similar to that provided to the U.S. Federal Reserve, he said.

Any attempt by the Bank of Japan to stem the yen's advance would be "foolish and would have little effect," Wakabayashi, 66, said in Tokyo.

Japan should ask the U.S. and Europe to take coordinated action to weaken the yen, financial services minister Shizuka Kamei said Wednesday in Tokyo. Japan hasn't intervened in the foreign-exchange markets since March 2004.

The dollar will briefly reverse its decline after falling to 80 in February, Wakabayashi said.

[AlbertSiegel]

94.56 GO BABY GO!

[AlbertSiegel]

[Russell]

Yep, and there is a huge unwinding of Yen carry trades, reversing the artificially low Yen exchange rates of the past few years.

[Mike Oxlong]

Japan Hints at Yen Intervention

via the WSJ...

[Russell]

Yep, lots of Yen carry trades unwinding...

[Russell]

Currencies: Race to the bottom The Economist

Three months ago, when Europe's debt crisis had markets panicking about sovereign risk, it seemed that all roads led to the dollar. The greenback was rising against the other big global currencies, the yen, pound and euro. Its role as the world's reserve currency seemed an inestimable advantage when investors were unsure where they could safely park their cash. Within the rich world, America's economy looked the best of a bad bunch. The stage seemed set for a dollar rally.

http://www.economist.com/node/16792926?story_id=16792926&fsrc=rss

[nottu]

[FG Lurker]

Kan and Noda Discuss Economy, Yen; Fail to Draw Up Fresh Stimulus Measures
Bloomberg, August 23, 2010

Japanese Finance Minister Yoshihiko Noda said he discussed the economy and currencies with Prime Minister Naoto Kan today, though the two didn't hammer out specific measures to boost a waning recovery.

"We didn't discuss that at all," Noda told reporters in Tokyo when asked whether stimulus measures were mentioned. Regarding the size of any package, he said that was not discussed either.

[Bank of Japan Governor] Shirakawa and Kan spoke today by telephone for about 15 minutes, according to Chief Cabinet Secretary Yoshito Sengoku. There was "absolutely no" talk of currency intervention, Sengoku said, declining to comment on whether monetary easing was discussed.

(Full Story)

This reminds me of a great political cartoon I saw long ago when Pierre Trudeau was PM of Canada. It showed Trudeau asleep in an air traffic control tower while the various parts of the country's economy were represented by planes that were falling apart and nosediving into the ground.

[Ketou]

No movement because there are only 2 shitty choices left....tax out of debt or monetize out of debt. Either one is a kick in the nads to the workers.

[FG Lurker]

No movement because there are only 2 shitty choices left....tax out of debt or monetize out of debt. Either one is a kick in the nads to the workers.

Well, taxing out of debt is a kick in the nuts to workers. Monetizing out of debt is a kick in the nuts to old fuckers on fixed incomes. Neither is a particularly attractive option but the longer they put off the choice the uglier things are going to get. The DPJ however is taking the 3rd option -- "Stick head in sand and hope the problem goes away on its own."

(Monetizing would actually be a not-so-bad thing for any working stiff with a big mortgage. Inflation + increased salary to balance inflation = lower real debt.)

[Doctor Stop]

The DPJ however is taking the 3rd option -- "Stick head in sand and hope the problem goes away on its own."

Wasn't that also the LDP option?

[FG Lurker]

Wasn't that also the LDP option?

In some ways, yes. The DPJ was supposed to be an improvement though... Instead we got the worst of the LDP combined with a complete lack of experience. I wish I could say I was surprised...

[Doctor Stop]

I'd say that the one difference is that the DPJ isn't as good as lining their pockets while their heads are in the sand as the LDP were.

[FG Lurker]

Naoshima Wants Group of 20 Nations to Cooperate on Stability in Currencies
Bloomberg News, August 26, 2010

Japanese Trade Minister Masayuki Naoshima said the Group of 20 nations should work together to keep currencies stable because it is in the interest of supporting the global economic recovery.

"G-20 nations are cooperating on policy right now to rebuild the global economy and I think currency stability should be a part of that," Naoshima said at a press conference in the central Vietnamese city of Danang today. "I have been calling on relevant ministers in the Japanese government to bring forth such proposals."

Since the yen's advance to a 15-year high against the dollar this month, Naoshima has said the yen has been "too strong." He said today that some Japanese companies are moving their factories abroad and instability in foreign-exchange markets will further encourage firms to go overseas to remain competitive.

(Full Story)

Perhaps the DPJ is finally waking up and noticing the havoc the strong yen is wreaking on the Japanese economy. Probably just wishful thinking on my part though, the DPJ has proven to be exceptionally good at having no fucking clue what the hell is going on. Total fucking clowns.

[IkemenTommy]

I am predicting the yen to break into the 70s when Ozawa gets chosen as the next PM. Japan will officially be fucked with the economy down the gutter

[FG Lurker]

I am predicting the yen to break into the 70s when Ozawa gets chosen as the next PM. Japan will officially be fucked with the economy down the gutter

Actually, I think the opposite may happen. A big part of the problem has been that Hatoyama and Kan are both pussies with no backbones/leadership abilities. The markets know they don't have the balls to actually do anything. Say what you like about Ozawa (and I'm no big fan), he's no pussy.