What's up with the value of the YEN?

[FG Lurker]

It was based on speculation that yen would be repatriated to rebuild --- not exactly a stupid bet. And, as it turned out, it was the right one. The short term after the quake was not hard to figure out what happened. Bonds went up, Nikkei tanked -- literally in seconds.

It was not correct, and there was no need to repatriate money after the quake. Here's why:

1) Japanese banks and insurance companies buy staggering quantities of Japanese gov't bonds. If they needed money after the quake they had plenty of funds in JPY already.

2) Insurance payouts in Japan for quake damage are restricted by law. There is a very short summary on Wikipedia, and much more reading here. Chapter 2 in particular covers the program and how it has developed over time.

Fun Fact: The strongest the yen was prior to the 2011 record was days after the Hanshin Earthquake.

Not days, months. The yen barely moved immediately after the '95 quake. The bottom was in April and was not related to the quake.

The country no, but you gotta think that any one in charge of a large corporation domicile in Japan has to read between the lines. IE -- BOJ is going to intervene, it's time to straighten your books out. They really only need the FX rate to be X/Y at a single moment every quarter or so.

Large corporations have their FX rates locked in months in advance and tend to be well hedged. They have to be, the amount of risk by not doing so is far too great for their businesses. The real evil of the heavily overvalued yen is the long-term damage it is doing to manufacturing in Japan.

I own a company that employs two people and even I was smart enough to do that.

You and the wife I take it?

Small businesses can take advantage of FX interventions if they have cash on hand that is waiting to be flipped from one currency to another. Most small companies try to maximize their cash velocity however, it doesn't make sense for them to sit on an FX transaction for moths waiting for an intervention that may or may not happen.

[gaijinpunch]

It was not correct, and there was no need to repatriate money after the quake. Here's why:

1) Japanese banks and insurance companies buy staggering quantities of Japanese gov't bonds. If they needed money after the quake they had plenty of funds in JPY already.

2) Insurance payouts in Japan for quake damage are restricted by law. There is a very short summary on Wikipedia, and much more reading here. Chapter 2 in particular covers the program and how it has developed over time.

Not saying it was right b/c it happened, I'm saying it was right b/c of the trend. It was already at an already painfully strong 81-ish. Who cares if the action really happens... it's the threat of it happening that mattered in this case.

Not days, months. The yen barely moved immediately after the '95 quake. The bottom was in April and was not related to the quake.

I didn't say that it was... just that that was the previous low. A factoid I read once it hit the new high.

You and the wife I take it?

Yes. and I did flip what I had at the last intervention at about 79. It didn't make a huge difference, but it helped a bit. I am guessing any company, small, medium, or large did so...across the board depending on how much of whatever currencies they had. I remember when a client "locked it in at 95 b/c no way would it get any stronger.".

I agree on the damage it's doing to production in Japan. I heard one guy say that exports were only X of GDP (15?) so it wasn't as bad as people were leading on. It's the long term jobs leaving the nation that's fisting everyone.

[FG Lurker]

Not saying it was right b/c it happened, I'm saying it was right b/c of the trend. It was already at an already painfully strong 81-ish. Who cares if the action really happens... it's the threat of it happening that mattered in this case.

It happened purely due to speculation, which is what I said before. There were no facts to back this speculation.

I didn't say that it was... just that that was the previous low. A factoid I read once it hit the new high.

Yes, there were lots of incorrect comments about that. Correlation does not equate to causation, the yen strength in '95 was not related to the quake any more than the yen strength caused the '95 quake. Eventually there were more accurate comments made as well, if you dig a bit now you can probably find articles from last year that describe why the yen was strong in '95.

Yes. and I did flip what I had at the last intervention at about 79. It didn't make a huge difference, but it helped a bit. I am guessing any company, small, medium, or large did so...

Of course everyone tries to take advantage where they can, that's business. Companies don't wait for an intervention to flip their funds however which is what you implied in your original comment.

I agree on the damage it's doing to production in Japan. I heard one guy say that exports were only X of GDP (15?) so it wasn't as bad as people were leading on.

Directly exports are ~15% to ~20% of the Japanese economy. On top of this there are a lot of businesses related to exporters who don't export, and of course the money earned by exporters and their employees gets spent in the domestic economy.

It's the long term jobs leaving the nation that's fisting everyone.

Definitely something we agree on.

[Coligny]

[Mike Oxlong]

[Coligny]

Up then down... 2009 was a killer...



Always mediocre... but synchronous... strangely not our style... usually we have a tradition of being late...

[IparryU]

[Samurai_Jerk]

[color="Red"]WARNING[/color]: Japan Times link...

Why do you keep warning us about Japan Times and linking to Japan Today?

[yanpa]

Because they call AKB48 a "music group"?

[Coligny]

Why do you keep warning us about Japan Times and linking to Japan Today?

Because Japan Today (mostly) is a place to avoid when you have decided to try to spend a day without thinking humanity should be wiped out of the planet on the spot. It makes the idiots in youtube's comments sounds like MIT graduates...

I for one welcome the warning...

You see... some people are afraid of boobs and enjoy the nsfw warning when there is a link to sankakucomplex or goldenshower.com . Some are afraid of mankind, or more precisely the logarithmic grows of stupidity oozing from idiots in large groups. JT seems to be one of those magical places where the stupid reach hurtfull proportions. ok skcomplex comments are equally bad... but i somehow consider remarks from mouthbreather on the latest tits and ass cartoon as less damaging for the collective IQ of mankind...

[Samurai_Jerk]

Because Japan Today (mostly) is a place to avoid when you have decided to try to spend a day without thinking humanity should be wiped out of the planet on the spot. It makes the idiots in youtube's comments sounds like MIT graduates...

I for one welcome the warning...

You see... some people are afraid of boobs and enjoy the nsfw warning when there is a link to sankakucomplex or goldenshower.com . Some are afraid of mankind, or more precisely the logarithmic grows of stupidity oozing from idiots in large groups. JT seems to be one of those magical places where the stupid reach hurtfull proportions. ok skcomplex comments are equally bad... but i somehow consider remarks from mouthbreather on the latest tits and ass cartoon as less damaging for the collective IQ of mankind...

Please reread what I wrote. I don't think you're getting the gist of my question.

[Coligny]

Please reread what I wrote. I don't think you're getting the gist of my question.

Then reread my medical file furst... am totally dyslklexique and JTs are simultaneously the same and 2 diffrent things for me depending on the phase of the moon...

[IparryU]

Please reread what I wrote. I don't think you're getting the gist of my question.

he actually answered it cause I started doing it because of him...

but he still is a bit retarded when giving responses... it is that damn mcnugget bbq sauce.

[Coligny]

Crayons d00d... it's them darmned crayons that are slowly getting at mah brain...

(but seriously, reread SJ... and come with me to the doc for a free disxlylexia diagnomastic)

[Samurai_Jerk]

he actually answered it cause I started doing it because of him...

but he still is a bit retarded when giving responses... it is that damn mcnugget bbq sauce.

You still don't get my question.

[IparryU]

You still don't get my question.

now i do... times/today... ya i get it.

[Mike Oxlong]

[Coligny]

Can't they lend money to greece !? Or print some bills with share of a nigerian prince inheritance as collateral ?

Usually their governement don't need much help to find incredibly stupid and disastrous things to do for brushing short term problems under the rug and turning them into major long term trainwrecks...

[Russell]

The solution is easy.

They should just print Yens and buy Japanese government bonds with them.

This would put an end to deflation, and at the same time would decrease the monstrous government debt.

[Coligny]

"For every complex problem there is a solution that is simple, neat and wrong".

[Ketou]

"For every complex problem there is a solution that is simple, neat and wrong".

You must spread some Reputation around before giving it to Coligny again.

[matsuki]

I don't think anyone's mentioned tegata or any other number of payment schemes used in Japanese business...surely that shit doesn't get recorded in most statistics we see.

[cstaylor]

Looks like it's on the way back up.

[Taro Toporific]

Looks like it's on the way back up.

Month to date it looks significant.

Month-Exchange Rates Graph (US Dollar, Japanese Yen) - X-Rates.jpg

Year to date it looks like Brownian Motion.

Exchange Rates Graph (US Dollar, Japanese Yen) - X-Rates.jpg

[gaijinpunch]

Call me when it's 83.

[Taro Toporific]

Call me when it's 83.

Ring, ring, ring...

USD_JPY-Chart-2012dec18.png

The Word is that if Abe and his butt buddies get all their ducks in a line, then he’ll be able to force quantitative easing and bring the yen down.
Sadly just as Abe wants a lower yen, so the Fed wants a lower dollar, but it impossible for all countries to ease (or devalue) their way to growth at the same time.
The Japanese elections drove stocks way up and the yen hit a new 20-month low against the US dollar for a few hours. Now the yen has settled back to the 83 yen to $1 USD range, meh.

[gaijinpunch]

Still closer to 84. I think the word on the street is most people are expecting to have some resistance at 84.5 and 88.5, but perhaps keep sliding steadily. That's good news for me, but I don't want to jinx it. My thoughts are fuck the fed. They've had 4 full years of the dollar at toilet paper status. There's only so much fecal matter the damn thing can take! This isn't a bad porno movie... "let the markets decide...." as they say.

[Russell]

I repeat:

The solution is easy.

They should just print Yens and buy Japanese government bonds with them.

This would put an end to deflation, and at the same time would decrease the monstrous government debt.

The mistaken policy the new government contemplates is not in the printing, but in the spending.

[kagemusha]

The mistaken policy the new government contemplates is not in the printing, but in the spending.

Totally agree.

[Screwed-down Hairdo]

I think, Russel, that's exactly what the LDP will do...it's the only option they can take. Print money, wipe out the government debt and the savings of all the poor pops and grans who slaved away for this cuntry for decades and then squirreled away because they thought they wouldn't get their pensions. Well, they'll get their pensions -- and maybe even more than they dreamed of -- but, of course, not indexed pro-rata for inflation and, viola, no pensions! In the meantime, the yen becomes fucking worthless again and Japan becomes a globally competitive manufacturer again. Why would Japan's government suddenly start caring for its people now? It has never done so before.
Third world education, third-world attitudes and you're not going to ever get much more than third-world responses. At least it'll keep those pesky fucking women and uppity gaijin in their places.