Economy The weakening of the yen

Biden just said he will defend Taiwan if China invades. I wonder if this will lower the yen back to about 102 yen a dollar.
 
Didn't he say that weeks ago? It seems like a non-issue in terms of its influence on the yen/dollar exchange rate. The current weakness has more to do with the Fed increasing rates, and the Bank of Japan maintaining its historically low rates. It means the US$ is super attractive and the JPY looks like a dog. So, people are dumping the yen in favor of other assets. The world is awash in yen, and there are not many buyers for it.

This could change in the wink of an eye. Recall the 2011 Eastern Japan Eartquake and tsunami resulted in a huge demand for yen, because the government began a massive program of rebuilding the area that was affected by the earthquake (which stretched down the east coast of Japan to Tokyo). Contractors needed to be paid in yen, so there was a huge surge in the demand for yen.
 
Here's the NYT once again explaining why the BOJ does not consider raising the interest rates to curb inflation and stop the free fall of the JPY.

The yen is in free fall. Inflation, by some measures, is the highest in decades. And conventional wisdom says a rate increase could ease both problems. But the Bank of Japan — never one to follow the crowd — has remained steadfastly committed to its ultralow interest rates, arguing that making money more expensive now would only suppress already weak demand and set back a fragile economic recovery from the pandemic. [...] Japan wants good inflation — the kind created by lively consumer demand. But it has gotten bad inflation — the kind created by a strong dollar and supply shortfalls related to the pandemic and the war in Ukraine — and that is why the bank should stay the course.
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In Japan, however, there is broad agreement that — at least for now — a rate rise would do more harm than good. The world's third-largest Japanese economy has barely returned to its pre-pandemic levels, and wages have stagnated. However, in a tight labour market, unemployment remained below 3 per cent during the pandemic's worst months. "To bring inflation in Japan down, you would have to slow demand rather sharply, and that's tricky because demand was already sort of weak relative to other economies," said Stefan Angrick, a senior economist at Moody's Analytics in Japan.
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Paywall alert:
www.nytimes.com

Why Japan Stands Virtually Alone in Keeping Interest Rates Ultralow (Published 2022)

The yen is plummeting and inflation is climbing, but Japan’s economic circumstances have led to a view that raising rates would do more harm than good.
www.nytimes.com www.nytimes.com


And I hope it won't require another earthquake to increase demand for the JPY. :oops:
 
Apparently, there was another intervention at the weekend, but it didn't have a lasting effect: 145 on Monday morning, now back to 149.

japantoday.com

Yen falls back to 149 zone against U.S. dollar despite apparent intervention

The yen retreated to the lower 149 zone versus the U.S. dollar after briefly surging to the 145 level Monday in Tokyo, with the effect of another apparent yen-buying intervention by Japan short-lived. Tokyo stocks ended higher, tracking gains on Wall Street on Friday amid speculation that the...
japantoday.com japantoday.com

 
Dang it, we are back to 140 today. I guess we need to look for cheaper hosting. :(

The yen weakened below 140 to the dollar for the first time since November on Thursday, as expectations of a widening interest-rate spread between Japan and the U.S. fueled selling. The Japanese currency has fallen by about 13 yen from its year-to-date high against the dollar in January and shows no sign of bottoming out. It has also softened against currencies like the euro and pound. The renewed sell-off in the yen comes as the Federal Reserve is expected to hike interest rates again by July, widening the gap with a Bank of Japan that continues to stand pat. Speculation that new BOJ Gov. Kazuo Ueda would move early toward tighter monetary policy has faded as he signals no change in the near term from the bank's ultraloose stance. In a media interview Thursday, Ueda warned against making hasty adjustments. So far in May, Japan's currency has weakened by about 4 yen against the dollar.
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asia.nikkei.com

Yen slides past 140 against dollar on BOJ chief remarks, Fed outlook

Sell-off quickens to six-month low as Ueda signals no change in easing
asia.nikkei.com asia.nikkei.com
 
We're again way beyond 150… 😭


The yen weakened past 150 to the dollar on Tuesday following higher-than-expected inflation data for the U.S. economy in January. The Japanese currency touched 150.87, its weakest against the dollar since the yen last broke the 150 threshold in November. The January U.S. consumer price index showed prices rising 3.1% from a year earlier, down from a 3.4% increase in December but cooling more slowly than the 2.9% expected by market watchers.
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Paywall alert:
asia.nikkei.com

Yen weakens past 150 against dollar on stubborn U.S. inflation

Market expectations for Fed rate cuts dim as American economy stays hot
asia.nikkei.com asia.nikkei.com
 
Yeah, that inflation data means no interest rate cuts there, or at least not soon, and even if they do cut, then perhaps only one time or two, and not several times or more.

I guess the next wildcard is whether the BOJ will intervene, and how strongly/often.

One flip side may be that since the US economy is chugging right along, Japan's exports there should be good. The reverse of that would be a US recession and rate cuts, probably strengthening the yen, but a weaker US economy might mean the value of exports would drop.
 
I wouldn't mind if it stayed that way until after our yearly Japan trip. Last year was pretty awesome expense wise for the trip.
 
We're hosting in the US. Our hosting fees have increased by 85% since we signed up with our current provider in 2011. If 1 USD remains at levels of +150 JPY, we might have to consider cheaper options. Anyone speak Russian?
 
thomas said:
We're hosting in the US. Our hosting fees have increased by 85% since we signed up with our current provider in 2011. If 1 USD remains at levels of +150 JPY, we might have to consider cheaper options. Anyone speak Russian?
Click to expand...
No cheap options in Japan?
 
mdchachi said:
He's not posting p#rn or bittorrrents...
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True, I forgot the reason though but I thought I remember someone saying it's harder to host in Japan than the US for legal reasons, but I guess we'll have to hear from him the answer, because maybe it is just more expensive somehow
 
Haruto Uzumaki said:
True, I forgot the reason though but I thought I remember someone saying it's harder to host in Japan than the US for legal reasons, but I guess we'll have to hear from him the answer, because maybe it is just more expensive somehow
Click to expand...
The libel laws are stricter in Japan. I know that's one thing you have to be careful about.
 
mdchachi said:
He's not posting p#rn or bittorrrents...
Click to expand...
No, but it's important to remember that Japan's take on copyright and defamation are decidedly at odds with western sensibilities.

While copyright law is almost identical in its basis to American & European copyright (all being based on the Berne convention) the precedents in Japan mean there is almost no recognition of fair use. I'm not sure if they have a parallel to the DMCA, but without one, publishers would be liable for the comments sections on their forums, so that would be an important question to resolve.

On the defamation side, the bar for defamation is much lower in Japan, and in particular, truth is not a defense to defamation in Japan. If you say true things and hurt a Japanese person or company as a result, you can be held liable.

Also, I don't believe there is any equivalent to the Anti-SLAPP laws in the US that can be used to get an early dismissal of frivolous suit.

Personally, I would not want to place a web site that comments on anything Japanese in Japan itself, it's just asking for trouble. Granted, litigation is far less common, but if it does come, it's going to be very hard to defend against.
 
We have reached 152.

Japan stepped closer to currency intervention with its strongest warning yet as the yen slid to the weakest level in about 34 years against the dollar. The currency dipped 0.3% to 151.97 per dollar in Tokyo on Wednesday, passing the 151.95 level that prompted Japan to wade into markets in October 2022.
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Yen Drops to Weakest Since 1990


I cannot believe this thread we had a few years ago. :LOL:

Could we see a 100 yen = $1???

OTOH, if major governments in the world did not cooperate in a coordianted global fiscal stimulus, we would all be in a major worldwide depression by now. 10% unemployment--ppffff! It could have easily been over 20. The dollar is weak because of decades of U.S. overconsumption. I was...
jref.com jref.com
 
I keep buying on this news and I keep losing money the lower it goes! It's got to come back doesn't it? 😰
 
Will we ever be back to rates around 120 JPY?? 😩

The U.S. dollar climbed to a fresh 34-year peak against the yen in quiet trading on Monday, with investors taking their cue from the Federal Reserve's higher-for-longer interest rate stance, even as they remained alert to any signs of intervention by Japan to prop up its struggling currency. The dollar rose to 154.85 yen versus the Japanese currency, its highest since mid-1990. It was last up 0.1% at 154.82 yen, a whisker away from the 155-level that is next on traders' radars for possible intervention. The yen hit fresh lows ahead of the Bank of Japan's (BOJ) policy meeting on Friday. Market players took note of the fact that Japan has refrained from intervening in the currency market despite the yen hitting several 34-year lows this year.
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At the rate US politicians are giving away money and going trillions in debt , our dollar may soon become worthless.
200.gif
 

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