Economy The weakening of the yen

[thomas]

Yesterday, the yen depreciated against the dollar to its lowest level in almost four decades, slipping to 163 as U.S.-Iran tensions drive up oil prices.

he yen's selling pressure comes amid escalating tensions in the Middle East, which prompted safe haven flows into the greenback. Traders are also viewing recent moves by Prime Minister Sanae Takaichi's administration as a sign of tolerance for yen weakness. In overseas trading on Tuesday, the yen fell into the 163 range for the first time since December 1986. As of Wednesday morning in Tokyo trading, the yen was weaker by 0.4% at around 163.21 per dollar. "The USD/JPY pair continues to trade around recent four-decade highs, despite last week's soft U.S. inflation report," said Matthew Ryan, head of market strategy at global financial services firm Ebury. "Rising oil prices are a downside risk for the Japanese economy, a net importer of energy, and are acting to help keep the yen on the back foot."

Paywall alert:

Yen falls to 39-year low of 163 per dollar on Iran tensions, Takaichi plan

Dollar buying accelerates as Brent futures climb above $92

asia.nikkei.com

 

[Lothor]

The first seven minutes of this video is a very well-explained primer about Japan's debt/bond crisis.

 

[johnnyG]

Yeah, it's the difference in interest rates that's behind the fall of the yen.

And maybe the kanto housing/condo market could use a little taming? (via increased rates)

 

[Lothor]

Yeah, it's the difference in interest rates that's behind the fall of the yen.

And maybe the kanto housing/condo market could use a little taming? (via increased rates)

The danger is hurting the ordinary Japanese person who borrows, say, 5,000 man over 35 years. Each percentage point increase in the base rate costs them an extra 2.5 man per month. There must be better ways of discouraging speculation, which is driving the price rises at the top end of the market.