What's up with the value of the YEN?

[Fullback]

The tens of billions of yen spent on intervention in the past decade were wasted, meaningless against the market tidal force on currency rates.

That's why no one is "doing" anything.

Using the same method currently in fashion for selecting leaders, a magic fairy sprinkles some dust and you're now the Prime Minister. Please tell us what exactly you are going to "do" about the yen and everything else. I look forward to reading your "manifesto."

[IkemenTommy]

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.

6 "leaders" in 3 years definitely will not get the respect from other world powers. The screwed up exchange rate is partly due to the instability of the instability of the current government leadership.

BTW, are people no longer questioning Ozawa's shady financial and corruption charges?

[Ketou]

They're all just puppets on a string anyway...it doesn't matter who you vote in. The real power lies with whomever gets to print the money we squabble over. And that ain't the government.

[AlbertSiegel]

geeze! I doubt I will travel to Japan anytime soon. The exchange rate just keeps getting worse. It seems as if it's going into the 70's in the near future. Makes me wonder how long before the big companies move all manufacturing overseas.

The funny thing is a few years ago most home electronics in the States where Japanese brands. Now, the number one brand for home electronics I see in stores is that Korean Samsung crap. I have yet to see one product of theirs that is not total junk. All American brands have been gone for years though now I am starting to see two American branded (RCA and PROSCAN) of off-the-shelf Chinese electronics here and there.

Chinese and Korean brands are out-selling Japanese brands by a large amount. It reminds me of the way things were when Japanese brands pushed the American brands off in department stores. Japanese cars took a large chink of the American car market. Japanese cars are still the big seller, but Korean cars are doing very well here too. Once Chinese cars flood the market I feel we may see a large shift in consumer preference. Americans are not brand loyal, they just want the lowest price they can get. Makes me wonder if Japan even matters anymore in the consumer market here in the States.

[Taro Toporific]

I doubt I will travel to Japan anytime soon.

Praise Bejebus, you will be saved from the Concrete Buttplug(tm)!

The exchange rate just keeps getting worse. It seems as if it's going into the 70's in the near future. Makes me wonder how long before the big companies move all manufacturing overseas.

Refer to Nissan, now Japan's No. 1 "foreign" car:
[INDENT]Sales of imported autos jump 75%
japantimes.co.jp | Tuesday, Sept. 7, 2010
Sales of new imported vehicles jumped 74.9 percent in August to 19,718 units, climbing for the 10th consecutive month, the Japan Automobile Importers Association said Monday.Of the total, sales of Japanese cars, trucks and buses made overseas surged to 5,690 units from 1,105 the previous year, while sales of imported foreign vehicles rose 38 percent to 14,028 units, the association said.
By brand, [SIZE="4"]Nissan[/SIZE] topped the rankings with sales of 4,729 vehicles, up sharply from a mere 21 vehicles the year before.
...more....[/INDENT]

[FG Lurker]

geeze! I doubt I will travel to Japan anytime soon. The exchange rate just keeps getting worse. It seems as if it's going into the 70's in the near future. Makes me wonder how long before the big companies move all manufacturing overseas.

This is happening now and every time the yen gets stronger the flood of manufacturing fleeing Japan just gets worse. It's a huge problem and those jobs are gone forever.

The funny thing is a few years ago most home electronics in the States where Japanese brands. Now, the number one brand for home electronics I see in stores is that Korean Samsung crap. I have yet to see one product of theirs that is not total junk.

Actually Samsung makes some pretty good stuff. Their flat panels (TFTs) are excellent and compare well with Sharp. For quite awhile Sony was using Samsung panels in their TVs, I'm not sure if this is still the case or not though. Apple uses Samsung and LG panels in their displays for the most part. Samsung also has a very large share of the flash memory market. (The flash chips in your iPod Touch are very likely Samsung.)

I bought a set of Kumho Ecsta SPT (KU-31) tires for the car recently. 4 tires for 60,000yen (mounted) was just too good a deal to pass up compared to 120,000 for Bridgestone or Yokohama. (Kumho is Korean and they don't sell a whole lot of tires in Japan. They did get a good review by the Tire Rack though and that was certainly a factor in my decision. So far I am very happy with them, if anything they are better than the Bridgestones that came with the car new.)

All American brands have been gone for years though now I am starting to see two American branded (RCA and PROSCAN) of off-the-shelf Chinese electronics here and there.

The American brands couldn't compete 'cause they were (for the most part) crap compared to what was coming out of Japan at the time.

Americans are not brand loyal, they just want the lowest price they can get. Makes me wonder if Japan even matters anymore in the consumer market here in the States.

Brands still count for a lot, especially for more expensive items. Japan's brands aren't going anywhere any time soon but the manufacturing won't be in Japan for much longer if the situation with the yen doesn't improve damn soon.

I don't like Ozawa but I hope he wins the DPJ leadership poll. I think he will push the BOJ to actually pull their heads out of their asses and take real steps to weaken the yen. Intervention is not likely to be effective but having the BOJ monetize the debt by buying long-term J-gov't bonds (a-la the Fed in the US) seems at least somewhat likely to convince speculators that the yen isn't a "safe haven" currency. (Using "safe-haven" in relation to the yen is a concept so ridiculous that I can't help but roll my eyes.)

In the end though, the yen WILL weaken. The US will have to raise interest rates eventually and Japan can't afford to do likewise any time soon. Just the thought of the US raising rates pushed the yen back to 95 earlier this year. Once it became clear that the US wouldn't be raising rates this year the yen rapidly moved back to 90, and now to 83 to 85.

[Jack]

I don't like Ozawa but I hope he wins the DPJ leadership poll. I think he will push the BOJ to actually pull their heads out of their asses and take real steps to weaken the yen. Intervention is not likely to be effective but having the BOJ monetize the debt by buying long-term J-gov't bonds (a-la the Fed in the US) seems at least somewhat likely to convince speculators that the yen isn't a "safe haven" currency. (Using "safe-haven" in relation to the yen is a concept so ridiculous that I can't help but roll my eyes.)

In the end though, the yen WILL weaken. The US will have to raise interest rates eventually and Japan can't afford to do likewise any time soon. Just the thought of the US raising rates pushed the yen back to 95 earlier this year. Once it became clear that the US wouldn't be raising rates this year the yen rapidly moved back to 90, and now to 83 to 85.

Don't you think that so long as Japanese companies make more money outside of Japan they will continue to repatriate their profits back to Japan and thus continue to buy yen making the currency even stronger? If U.S. rates rise as they will inevitably do, I am not sure the yen would decline much. I think we are going to see a USD/JPY exchange rate of under 80 this year. For Japan's economy's sake, I hope I'm wrong.

[FG Lurker]

Don't you think that so long as Japanese companies make more money outside of Japan they will continue to repatriate their profits back to Japan and thus continue to buy yen making the currency even stronger? If U.S. rates rise as they will inevitably do, I am not sure the yen would decline much. I think we are going to see a USD/JPY exchange rate of under 80 this year. For Japan's economy's sake, I hope I'm wrong.

We certainly seem to be heading towards the 70s in a hurry. Do I hear the 60s knocking? Hell, maybe we'll do like the GBP did and get to 50/dollar or even into the 40s. I guess it depends on how much further the rest of the world has to fall.

I really don't know what to think anymore.

[FG Lurker]

I'm not sure what just happened in the currency markets but in the past 20 mins the yen has weakened from 82.9 to 83.9...

[FG Lurker]

Well, finally the news hit that Japan has intervened in the currency markets.

It will be interesting to see how traders in London and New York respond to this. If the yen's movements have been mostly due to speculation then I feel the intervention will be fairly successful. If however the yen's strength has been for fundamental economic reasons then it will be very difficult to weaken the yen significantly. It's going to be interesting to watch...

[Coligny]

I'm not sure what just happened in the currency markets but in the past 20 mins the yen has weakened from 82.9 to 83.9...

Greiji ordered a pizza...

(c'mon, you know that this joke make certainly more sense than the real reason anyway...)

[AlbertSiegel]

I'm not sure what just happened in the currency markets but in the past 20 mins the yen has weakened from 82.9 to 83.9...

Watching with great interest....

[Jack]

Just sold a bunch of yen at around 83. Let's see if I'll be able to buy back anywhere north of 86 or 87.

[FG Lurker]

US Markets Set to Digest Latest Bout of Yen Selling
DailyFX via Yahoo! Finance, September 15, 2010

Price action in Wednesday trade has been all about the Yen, with all other major currencies taking a backseat after the Bank of Japan finally moved to actively intervene in the FX market. The Usd/Jpy market traded to as low as 82.88 in early Wednesday trade before the MOF formally asked the Bank of Japan to intervene. Ever since, Usd/Jpy has gone parabolic with the pair rallying by well over 200 points thus far, with pullbacks limited to only a few pips and the MOF still warning of more intervention to come.

In retrospect, the move seems quite logical in some ways from a timing standpoint, with the DPJ election now behind us and concerns over political moves becoming less relevant now that Mr. Kan has secured his position. Unlike the SNB, the BOJ has been a good deal more effective in the past with its intervention efforts and we would therefore caution any traders that may be looking to fight against the central bank. One of the reasons that we feel the BOJ is so effective is the central bank's understanding for price action and respect for technical levels within the market.

With the Yen at multi-year highs against the buck, the timing for intervention is seemingly near perfect, as Yen bulls have already made more than a good living off of the trend and are most probably content in taking profits, while Yen bears will be glad to piggy back on the intervention and begin to build longer-term and more meaningful Yen short positions. There are very few trades out there that offer a positive carry (albeit only fractional) and at the same time have so much upside potential. Many feel the long Usd/Jpy is a highly attractive trade with room for massive upside over the next several months.

(Full Story)

Things have held well during the London session, better than I expected. NY opens in another ~40 minutes though, and that's when the real volume hits. (Biggest trading volumes are during the hours that both London an NY are open.) How the yen moves starting from 10:30pm JST will tell us a lot about how successful this is going to be.

[Ketou]

Selling the Yen? In which case they would have to receive something in return, which is what? US Dollars?
Which would be just buying dollars under another name......correct me if I'm wrong on this, but Japan just started buying into a failing currency??

[Fullback]

Intervention by the BoJ has wasted tens of trillions of yen. Bandages to treat a cancer.

Japan does not need any more government debt from these interventions. They finally figured out that it wasn't working, and now we have to go through the same learning curve again? The government can't redeem the debts by selling US Treasuries, since this would drive down the dollar more and most likely drive up US interest rates. The Japanese government will have to keep rolling over its debt, or selling longer-dated bonds.

The fundamental problem is that the US economy is hanging over the edge of a cliff and the dollar is reflecting that. This intervention smells like panic.

The bounce will be just another dead cat bounce.

[Iraira]

[Jack]

Selling the Yen? In which case they would have to receive something in return, which is what? US Dollars?
Which would be just buying dollars under another name......correct me if I'm wrong on this, but Japan just started buying into a failing currency??

Usually a basket of currencies in their trading partners in economic proportion. If those trading partners are big enough to move large volumes. In this case I assume it is largely USD and Euro with maybe some GBP.

As for buying into a falling currency, it all depends on how you look at it but the BOJ is trying to make the falling currency a rising currency against the Yen. More importantly, it is trying to send a clear message to the market, but little does he know that the market thinks the BOJ is just as impotent as the government of Japan.

[nottu]

[nottu]

[Ketou]

[nottu]

[Fullback]

Well, as predicted, the yen bounced right back to where it was before the intervention.

Stupidity is relentless.

[IkemenTommy]

All they can do now is bend over and take it up the ass.

[nottu]

[Cyka UchuuJin]

wtf just happened? yen just dipped below the 82 mark!

[FG Lurker]

wtf just happened? yen just dipped below the 82 mark!

http://www.bloomberg.com/news/2010-10-08/dollar-falls-below-82-yen-for-first-time-since-1995-on-u-s-payroll-report.html

[Cyka UchuuJin]

http://www.bloomberg.com/news/2010-10-08/dollar-falls-below-82-yen-for-first-time-since-1995-on-u-s-payroll-report.html

mmm, not good at all. i just stopped my trades on USDJPY, not in the mood for a roller coaster today.

you think it'll stay under 82 now? it bottomed out at 81.75 a few minutes ago.

[kino]

I'm not an economist, and I don't really understand the FX market, despite having dabbled in it a bit, but doesn't the yen seem to be overpriced? It feels just a bit like a bubble because the stronger the yen gets, the worse the Japanese export-based economy becomes. Hence the motivation for the BoJ recent monetary easing (which, apparently, did jack shit). So, if you are an investor, putting your money into the yen seems like a way to bite yourself in the ass.

[FG Lurker]

doesn't the yen seem to be overpriced? It feels just a bit like a bubble

I believe it is pretty much behaving like a bubble at this point. Sooner or later it will pop and fall. The question is how much longer will it take.