Aso urges BOJ to be mindful of weak-yen risks

Interesting times. The government wants the BOJ to go steady on the monetary easing, and wouldn't mind the yen a bit stronger.

But they themselves have opened the floodgates. Aggressive monetary easing is the first arrow of Abenomics. That the pension funds are increasing their overseas investment allocations, further pressuring the yen, is also a product of Abenomics. And Aso's ongoing reckless fiscal policy is hardly supportive for the yen either.

This Aso jaw-boning may help to keep the yen steady in the short term while European issues have the focus, but if the US economy continues to improve on the back of it's energy production boom, the yen will likely fall to 125 against the dollar later this year or 2016, and if I hazard a guess it will probably drop to 130 and 140 in fairly short order after that.

Aso and his band of career politicians ought to stop trying to engineer the exchange rate, posing for photographs, and actually enact an appropriate policy mix that will sustainably allow the Japanese economy to improve.

Some lawmakers have criticised the BOJ’s unexpected decision to expand monetary stimulus last October as having triggered excessive falls in the yen that have boosted import costs and hurt households’ disposable income.

Bingo. That sword cuts both ways. Yup, Toyota and many of the major exporters are making huge profits because of the weak yen, but the average person working in a domestic-focused company is ju

A great portion of the yen's "decline" is really the dollar shooting up on the strong US economy.

No need for all the hand-wringing in Japan. Against the euro, the yen is up only a bit from 2 years ago.

The euro/yen rate is up a bit more than only a bit. From below 100 in 2012 prior to Abenomics to 130 today is 30% (and this is after Draghi commenced his own currency crushing QE operation).

There are better examples of crappy currencies to compare the yen against. The yen is doing relatively well compared with the Russian Rouble and Ghanaian Cedi.

But if we are serious and compare against the major ones, the yen is down across the board.

"The euro/yen rate is up a bit more than only a bit"

April 10, 2013 = 130.11 Today = 131.07

Once again, I said, "up just a bit."

"There are better examples of crappy currencies to compare the yen against."

Canadian dollar? April 10, 2013 = 98.6. Today 95.4.

Yep, a real, chronic nosedive in the yen there, folks. LOL.

April 2013 was already several months into the Abenomics experiment. Did you choose it because that's when Kuroda's QQE started?

Markets price things in before they actually happen - as I'm sure you know. In the case of Abenomics, the yen was commencing its plunge on Abe's election campaign messages. So one can't discount the 20-30% plunge in value against the Euro (and other currencies) that occured during the Abenomics period prior to the actual start of Kuroda's actual QQE measures.

Canadian dollar?

See above. The Canadian dollar is still more than 10 yen above where it was prior to Abenomics, and this is even with the crash in oil prices since last year.

Dollars, Euros, Swiss Francs, British pounds, Aussies, Kiwis - the yen is down against them all, when honestly compared with pre-Abenomics.