How Low does Euro go against JPY?

[Astroboy]

Euro to Japanese Yen Exchange Rate in 5 years

Since mid-2008, Euro has continued to drop against JPY. 1 Euro was nearly JPY170 just one year ago, but it is now about JPY125, down by some 25%.

IF I export something to EU and paid in Euro, my net income in JPY shrink by some 25%. I wonder how low Euro will go against JPY.

 

[Astroboy]

This is a list of countries by gross (i.e. total) external debt.

"External debt" is defined as the total public and private debt owed to nonresidents repayable in foreign currency, goods, or services. The list is based on The World Factbook unless otherwise noted. Source accessed on October 2008. For informational purposes several non-sovereign entities are also included in this list.

External debt USD mil. External debt (% of GDP)
1. USA: $13,703,567 ----------------- 99.95%
2. UK: $10,450,000 -------------------376.82%
3. Germany: $4,489,000 --------------- 159.92%
4. France: $4,396,000 ----------------- 211.86%
5. Netherlands: $2,277,000 ------------ 352.75%
6. Ireland: $1,841,000 ----------------- 960.86%
7. Japan: $1,492,000 ------------------ 34.93%
8. Switzerland: $1,340,000 ------------ 441.95%
9. Belgium: $1,313,000 ---------------- 348.74%
10.Spain: $1,084,000 ------------------ est. 79.65%

List of countries by external debt - Wikipedia

Japan is known as heavily-national-budget-deficit nation (some 190% of GDP), but J-government's debt is consumed within Japan. In short, creditors of J-bonds are Japanese consumers, financial institutions and corporations.

However, so-called "prosperous" European countries are quite different from Japan. Their creditors are foreigners.

Assuming that I am sacked in the amid of recession but with tons of debts (e.g. home loans), my life must be very painful because banks will not wait for repayment.

External debts of European countries must be similar to .... such a case, I think. Creditors are foreigners (banks) and European countries are the employees sacked in the midst of recession.

Looking at the aboves, It is likely that European countries hold heavily interest-bearing-debts from outsiders. This fact may be one of the reasons why Euro continues to decline against JPY and USD....

 

[Astroboy]

Today Euro dropped further down to JPY --- below JPY120 or JPY119.

 

[JerseyBoy]

Are Europe's external debts owed primarily by the other European countries? In that case, that could be considered national debts as those countries are part of EU's common market.

 

[Astroboy]

Are Europe's external debts owed primarily by the other European countries? In that case, that could be considered national debts as those countries are part of EU's common market.

So you believe that French are willing to bail out Irish debt .... under the beautiful EU flag ?

 

[Astroboy]

Europe on the brink of currency crisis meltdown

The latest data from BIS shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.

They account for three-quarters of the total $4.7 trillion £2.96 trillion) in cross-border bank loans to Eastern Europe, Latin America and emerging Asia extended during the global credit boom – a sum that vastly exceeds the scale of both the US sub-prime and Alt-A debacles.

Austria's bank exposure to emerging markets is equal to 85% of GDP – with a heavy concentration in Hungary, Ukraine, and Serbia – all now queuing up (with Belarus) for rescue packages from the IMF.

Exposure is 50% of GDP for Switzerland, 25% for Sweden, 24% for the UK, and 23% for Spain. The US figure is just 4%. America is the staid old lady in this drama.

Amazingly, Spanish banks alone have lent $316bn to Latin America, almost twice the lending by all US banks combined ($172bn) to what was once the US backyard. Hence the growing doubts about the health of Spain's financial system – already under stress from its own property crash – as Argentina spirals towards another default, and Brazil's currency, bonds and stocks all go into freefall.

Broadly speaking, the US and Japan sat out the emerging market credit boom. The lending spree has been a European play – often using dollar balance sheets, adding another ugly twist as global ﾂ"deleveragingﾂ" causes the dollar to rocket. Nowhere has this been more extreme than in the ex-Soviet bloc.
Western European banks exposed to 'emerging markets' bubble

The above story is frighting, and thus French Sarkozy and British G Brown are desparate.... and Euro has been declining to JPY as well as USD, I think.

 

[Kanye]

The British government are losing control. I think they may need help from the French and the US.

 

[Astroboy]

Switzerland cuts key interest rate range to zero-1%

The Swiss National Bank on Thursday slashed its benchmark three-month interest rate by half a percentage point to a range of zero to 1.0 percent, marking its fourth consecutive cut in three months.
http://business.maktoob.com/NewsDet...d_cuts_key_interest_rate_range_to_zero_1_.htm

Although Swiss is not EU member, I believe that the country should be an indicator of EU financial trends. Swiss base rate cutting must be the near future of ECB, meaning Euro may decline against JPY further as ECB will cut the base rate like Swiss.

Hope that ECB will not follow Swiss Bank.

 

[EmperorHirohito]

The Yen has moved slightly higher, it is now JPY130 to the Euro.

 

[jguticon]

I only know I had money to buy a home in Japan and now I haven,t....I am spanish, and with the stupid president we have, Gods knows when we will recover....

 

[EmperorHirohito]

Am sorry to hear your news Jguticon, the Euro is now regarded as a major currency, and as of today 1 Euro is now worth 129 Yen. In terms of economics this means that for anyone converting Euros into Yen, they are getting less Yen for their money, which in turn things will seem to be more expensive to buy in Japan. However the reverse now applies to all those using the Yen to buy things in Europe, they will now find that products will effectively cost less, as they now have to pay out less Yen in order to get Euros. That is the way that currency exchanges work, there are always winners and losers.

 

[Astroboy]

Yen Spikes On European Debt Fears
The euro dropped to fresh 14-month lows against the dollar Thursday, and the yen surged as investors fled riskier assets over concerns that sovereign debt problems could engulf the weaker euro-zone members.

I really don't understand why investors see JPY as safe heaven, while world's financial authorities continued to tell "Debt-laden (200% of GDP) Japan is unsustainable ...."

I would like to tell Japan's public debt is unsustainable ! Please do not buy JPY.

 

[Astroboy]

Euro Falls to Lowest Since Lehman as Breakup Concern Increases
The euro fell 2.2 percent to 113.77 yen, the lowest level in a week, from 116.27.
Bloomberg - Are you a robot?

Plus 10-years yield of Japan's government bond again fell to 1.295% today.

JPY and JGB of Japan, being much worse than Greek, are more purchased as safe heaven ... I look forward to explanations from Financial Times/The Economist, which continued to tell "200%-GDP Debt-laden Japan is unsustainable". Or They (Financial Times/The Economist) are unsustainable ?

 

[Astroboy]

Stocks: Fall Sharply As Weak Euro Hurts Sentiment
Nikkei said
The euro slid to the lower 112 yen level at one point in Tokyo during the day, compared with the 116 yen level last Friday. A strong yen is detrimental to Japanese exporters because it eats into their overseas profits when repatriated....

Dear European Leaders,
Instead of talking about meaningless rescue package to Greece and Club Meds, I suggest you to complete political integration asap for one fiscal policy. From my point of view, I don't know WHO governs Euro. As a result, we are being affected.

In the meanwhile .... The following music suddenly crossed my mind ....

Europa by Santana

Take Care !

 

[bailing]

Hope you will recover soon!