Strong yen, waning demand slow Japan's export pace
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21 Comments
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0
goddog
Why is the Yen so strong?
0
lovejapan21
"Waning foreign demand poses a major risk to Japan’s export-led economy. Exports alone account for around 15% of Japan’s economic growth." How can an economy be led by 15%?? what happened to the 70% that accounts to services. Japan's economy is led by service not exports!!!!!!
0
some14some
forget exports invite Chinese tourists and earn foreign exchange...too little?!
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GJDailleult
Because of zero interest rate policy in the US and the fact that everybody wants to get out of the dollar before they dump trillions into their financial system next month. Pure currency manipulation to prop up the US financial system, they can take the money and buy up assets around the world, pushing the dollar lower as they do it. So anybody with yen loans wants to pay them back before that happens obviously, and also no need to borrow in Japan and then sell yen anymore if everywhere has zero interest.
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globalwatcher
Apart from weak demand abroad, the government said a rising yen was also hurting Japanese exports.
Wow, is this all what Japanese government has said? Everyone already know that. And it became a news? Where is a solution? LOL.
This is an insult to everyone in Japan who is working in sweat, dust and poverty.
0
asahi_man
lovejapan21 at 01:29 PM JST - 25th October
"Waning foreign demand poses a major risk to Japan’s export-led economy. Exports alone account for around 15% of Japan’s economic growth." How can an economy be led by 15%?? what happened to the 70% that accounts to services. Japan's economy is led by service not exports!!!!!!
Most of those services you talk about service the major manufacturers who are the exporters!!!
0
jruaustralia
Too, too early to discuss decoupling-- it was the buzz word a few months back but I think people have been hoodwinked to believe that a weak US currency and strong valuation elsewhere means its the dawn of that much fabled 'decoupling' era.
Alas, the fall of the Aussie dollar last week (at the same time of China's i. rates decision) confirms to me that these wild movements have been the work of currency hawks... AND DOES NOT REFLECT THE REAL MARKET VALUE OF SEVERAL CURRENCIES.
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BurakuminDes
I love this strong yen - as I'm sure most of you guys too! It means that bit more cash in the kitty for our Xmas trips (depending where you are heading this year, that is...)
jrAustrlia - the Aussie is still going up, buddy. Pretty much back to parity with $US - and many economists are tipping it to rise to $1.10 by years end.
0
asahi_man
BurakuminDes - that's a very short sighted view of things, the yen needs to be strong !!!
0
jruaustralia
I was going for 1.20 but it'll be a pretty stressing climb after the fall... 0.99 this afternoon it seems BUT WHO KNOWS...
It's fishy and the movement too misleading.... I imagine the Reserve Bank is now contemplating holding the rates, which I certainly hope they'll do-- in defiance of the IMF calls to hike the rates.
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BurakuminDes
You are right jrAus. Who knows what on earth is happening behind the scenes with the intervention of reserve banks, etc. All I know is - now is a dirt-cheap time to buy up greenbacks, Pounds and Euro if using $Aussie!
0
SuperLib
Isn't there a contradiction with a strong yen? By making the yen stronger and stronger they're making the Japanese economy weaker and weaker. So.....how can one buy yen to be "safe" when in fact buying more of it actually makes the economy less safe?
Personally, I think speculators are part of it, too. They know that Japan has to step in at some point so they're looking for a quick 1-day kill when that happens. Japan's caught in a cycle where it's so strong that there's incentive to push it right back up again even if the BOJ intervenes. The BOJ can't really intervene to the point where they can overcome that hurdle.
I've also read about the US government not doing much to stop the decline of the dollar so the US can create growth through exports, which appears to be working, and it also put pressure on countries like China which has largely pegged their currency to the US dollar.
0
minello7
"A strong yen cuts the value of repatriated profits for Japanese exporters like Toyota Motor Corp and Sony Corp", Please excuse my igorance on most these financial matters,but do not Toyota and Sony and the big manufactures have overseas manufacturing bases,were profits are made and local taxes are implimented.Doesn't that mean these big corporations keep their money offshore and return it to Japan when the money market is in their favour.Otherwise why is it benificial to both Japanese manufacturers and the overseas counties offering incentives to build plants ,create employment and in return get the taxes on profits made.Plus I would think there is a lot of happy Japanese import companies at the moment.While there is decreased Global demand for Japanese goods,it is still showing a profit. I think I'd be happy to make a 1000yen profit than a 10,000yen loss.
0
jasperandy
All of Japan's cpmpetitors actively devalue their currency, Japan just needs to do the same and not worry about threats from others. If the BOJ shows that it is serious about devaluing the curreny then traders will not bet against it.
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jruaustralia
LoL Even if that's the case Japan would still be buying worthless US dollar. I just read another round of quantitative easing courtesy of BERNANKE-- which means they'll effectively be buying to lose...
Sounds desperate and daft. So an argument for additional intervention should be scrapped for now... and time for GoJ to sustain their other options of corporate tax easing, etc =/
0
globalwatcher
@iruaustralia
just read another round of quantitative easing courtesy of BERNANKE-- which means they'll effectively be buying to lose...
You've got it! Good catch! Yes, Bernanke company is buying to lose, and next QE is on the way.
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sfjp330
jruaustralia at 08:50 PM JST - 25th October. and time for GoJ to sustain their other options of corporate tax easing, etc =/
This is a bad time for corporate tax easing. By making the tax cuts permanent now would actually increase economic uncertainty. It would increase the Japan's underlying fiscal gap, the difference between projected revenues and spending and raise uncertainty about how the government will eventually close the gap.
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sfjp330
SuperLib at 04:24 PM JST - 25th October. it also put pressure on countries like China which has largely pegged their currency to the US dollar.
The Yuan is no longer pegged at 6.83 per dollar. As of June of this year, the Yuan has adjusted about 3 percent to 6.65 and still fluctuating. China's export products will gradually increase prices in overseas market. This is a good sign.
0
lovejapan21
@asahiman...look up the term service industry... so ur telling me that all the banks, insurance companies, hair salons, liquor stores, clothing shops, garages to service your car, etc...are all there to service the exporters..hahah..banks, insurance companies are the largest organizations in Japan..and dwarfs the export industry in $ and labor force :) Dont buy in to the media...jsut like the war on terror..most people buy into it, so are you guys with the yen!!
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jruaustralia
Well, KAN already signaled tax easing to be his/ part of his PLAN B. I suppose if you're concern with Japan's fiscal deficit (as I was in 2008)... then he might stick with it to benefit, albeit temporarily, Japanese corporations.
If you're worried about the recovery, and at the same time a mounting nat'l deficit, then I probably wouldn't go for economic stimulus-- which obviously Mr OBAMA has opted for.
Personally, I don't think the GoJ is anxious to close the gap... but at least they should moderate additional spending, and be more sensible in bolstering recovery efforts.
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jruaustralia
"If you're worried about the recovery, and at the same time a mounting nat'l deficit, then I probably wouldn't go for economic stimulus"
mmmm... sounds redundant now, with the announcement of Y5 trillion-worth of 'supplementary budget'. Oh well....
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