Is the U.S. fiscal house currently in disorder? They are one of the countries greater in debt (here's some recent data), but they are also a rich country that can service their debt. The volatility will remain while Trump is there – people like him know no boundaries. I'd be selling my dollars.That was my initial thought too but I think it's perhaps more likely the dollar will remain strong against the yen on average. If the U.S. gets its fiscal house more in order (even while destroying its society and working class) the markets could remain strong. Of course that's assuming democracy, such as it is, continues to function. There's sure to be a lot of volatility for a while though. It's the uncertainty the markets don't like more so than the actions that have been taken.
By more order I just meant reducing the debt. Anyway my life is dollar based so I can't switch to another currency. My immediate decision is when I visit Japan in a couple weeks should I convert $0, $1000 or maybe $5000. Probably wouldn't be more than that given the uncertainty.Is the U.S. fiscal house currently in disorder? They are one of the countries greater in debt (here's some recent data), but they are also a rich country that can service their debt. The volatility will remain while Trump is there – people like him know no boundaries. I'd be selling my dollars.
One thing Trump should know is part of the dollar value is getting others to do transactions in dollars, for example oil. Dedollarisation not Fort Knox is how you lower the value of the US dollar. He should be careful about undermining the confidence in the US.The US government is currently trashing the state machinery and treating former friends like enemies, and the markets don't like it. Even with supposedly US-first policies, the dollar is about 2% weaker against the yen than it was a month ago (the pound and euro are both about 2% higher). As the US becomes a pariah, more countries will be making arrangements with other countries, as Canada is already rapidly doing, which will reduce demand for dollars. The West has been in long-term decline and, as one commentator recently put it, Trump has slammed his foot on the accelerator. I would be buying yen now rather than in a few years. Japan's slow decline due to depopulation and ageing is predictable; America's could be sudden and violent.
My preference would be to hold US$, all things considered. Too much uncertainty, most of it generated by the US itself. But in times of uncertainty, people dump risky assets and cling to the most stable one around.
Japan is a beacon of sanity compared with the US government
I wouldn't call it currency trading or investing so much as parking. If you have a billion dollars or so where should you put it if you want to put it in a safe place. The dollar is historically strong and is likely to weaken -- that's even a stated policy of the administration. And not only that, there's really no telling what's going to happen economically this year. In other words, the volatility of the U.S. situation could make it a riskier place to park money than Japan. At least for now. And who is pulling dollars out of the U.S.? China is the second largest foreign U.S. debt holder. It may make even more sense for them to move their holdings out of the U.S. given the fact that they seem to be permanently on Trump's naughty list because they refuse to lick his orange balls.Well, there is nothing to disagree with in that statement. But personally, I'm surprised that the market sees holding the yen as a safer bet than holding the US$. Long term, the US$ would always seem to be a safer haven, given geopolitical uncertainly, and, maybe more importantly, Japan's demographic quicksand. And Japan's debt-to-GDP is another ticking time bomb.
So for investors or currency traders to take all of that into consideration and still think, "I'll take the yen over the dollar", is really astonishing. But maybe people are just making short-term bets based on the recent craziness. I don't know enough about currency trading. Well, I don't know anything about it. I would just think Japan's risks don't go away, even if America is having an unusual political freak-out right now.
The yen weakened past the psychologically significant threshold of 160 to the dollar on Thursday and long-term Japanese government bond (JGB) yields surged to above 2.5%, as fears grew over the consequences of inflation fueled by the deepening energy crisis sparked by the prolonged war in the Middle East. In afternoon trading, the yen was down 0.7%, slipping into the upper 160 range. At one point, the yen touched its lowest point against the dollar in 21 months. The Japanese currency had fallen past the 160-mark during Wednesday trading in New York as investors sought so-called safe-haven assets like the greenback. The depreciation has raised speculation that Japan's financial authorities might intervene to prop up the yen.
My last post on this (I don't want to bore you!). It looks like the intervention has finished, but the pound has already recovered half its lost value. It may be that this policy is becoming ineffective, as the market quickly restores the yen to its value perceived by traders.
The Japanese government and the Bank of Japan intervened in the foreign exchange market on Thursday by buying yen and selling dollars, a government official confirmed to Nikkei. The move pushed the currency to the 155 yen range against the dollar after it had softened to around 160 earlier that day, its weakest level in one year and nine months. Finance Minister Satsuki Katayama and other officials had issued verbal warnings against excessive yen depreciation earlier on Thursday evening, with Katayama telling reporters: "The time is drawing near to take decisive action" against the sharp decline in the Japanese currency. The last time authorities stepped in to strengthen the yen was in July 2024, when it hit 161.96, its weakest level in around 38 years. That intervention lasted two days and totalled 5.53 trillion yen ($35.2 billion at current exchange rates).
Japan likely spent an additional 4 trillion yen ($25.6 billion) to shore up the yen in another suspected market intervention following a yen-buying operation on April 30, a market estimate based on Bank of Japan data showed Thursday. The latest estimate brings the total size of suspected operations in May and on April 30 to around 10 trillion yen. On Friday, Monday and Wednesday, volatile moves were observed on the foreign exchange market, with the yen briefly jumping 1 to 2 yen against the U.S. dollar into the 155 zone, fueling speculation that the government conducted further rounds of intervention after doing so on April 30.
The yen fell to a 39-year low against the greenback on Monday, as dollar buying driven by U.S. rate-hike expectations mounted pressure on the Japanese currency. The yen touched 161.98 per dollar at one point, the weakest since late 1986. This surpassed the currency's most recent low of 161.96, recorded in July 2024. Japan's currency has faced sustained pressure as investors favor the dollar amid expectations that the U.S. Federal Reserve could raise interest rates once or twice this year. Recent U.S. data on employment, consumer spending and business sentiment suggest resilient growth, while Middle East-related inflation concerns have reinforced views on tighter monetary policy.
"Intervention can slow a fall, punish speculative excess and signal official discomfort. But it cannot repeal arithmetic," said Christy Tan, global investment strategist at Franklin Templeton Institute. "As long as investors can borrow cheaply in yen and earn more in dollars, the carry trade will keep carrying the yen away," Tan added, referring to the strategy where investors borrow in low-yielding currencies such as the yen to buy higher-yielding assets, which has weighed on the Japanese currency. That arithmetic has become increasingly difficult for Japan to fight. The BOJ's latest rate hike to 1% marked a meaningful step in Japan's long exit from ultra-loose policy, but borrowing costs remain far below those in the U.S.
And it doesn't say how many people. But yeah the exchange rate is incredible. If only there were Star Trek-like transporters available. I'd head to Japan every weekend. It's almost impossible to get a fast food lunch for less than $10 (Y1500) where I live and I'm not in a high-cost area.
アメリカからやってきたというグループは、6日間の東京観光で160万円を使う予定だという。2週間かけて京都や奈良、長野などを巡ったというオーストラリア人家族の旅の費用は、300万円だった。
Clearly they weren't around during the Japanese bubble days. I do empathize with them. It doesn't seem like this exchange rate is sustainable.The Japanese comments in the X post are pretty pathetic and reflect deep resentment against those "rich inbound foreigners" who benefit from the weak yen while ordinary Japanese struggle. Others mention the insane wage gap between the US and Japan. How the tables have turned.