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Money talk

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Bank of Japan (BOJ) Governor Haruhiko Kuroda, center, speaks to the media after meeting with Prime Minister Shinzo Abe at Abe's official residence in Tokyo on Tuesday. Kuroda said it was important for currency rates to reflect economic fundamentals, and reiterated that central bank policy is aimed at fostering price stability and not to weaken the yen.

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But what will happen when Jannet Yellen start increasing the interest rates .

0 ( +2 / -2 )

Now there's a guy who doesn't ever have to worry about common people's problems, such as ever being unemployed or not being able to pay the bills....

1 ( +2 / -1 )

Yes, and pigs can fly. If that is so, why continue with the policies that are weakening the yen. This fanatical objective to achieve 2% inflation is actually destroying the currency.

3 ( +5 / -2 )

But what will happen when Jannet Yellen start increasing the interest rates . the $ will probably rise due to people putting there money into the US$, basically the opposite of when the Feds was printing money flat out for 5+ yrs

0 ( +1 / -1 )

BS! Abe has already been caught red-handed in this lie about intentional deflation of the yen. It is 100% their goal to do that in order to try and meet this wacko's promises.

8 ( +9 / -1 )

Lip service, said exactly what the US and other markets wanted to hear, but is actually keeping the Yen low to prop up big Japanese companies and exports.

1 ( +2 / -1 )

People, Japan is not an exporting country. Most Japan's GDP come from the domestic business. Japan's huge debt is the reason that Japan need inflation.

-6 ( +2 / -8 )

tinawatanabe: "People, Japan is not an exporting country."

Are you kidding? Japan imports raw materials -- the companies for which are suffering immensely now thanks to this man and Abe's INTENTIONAL deflation -- in order to create electronics and products for export. Abe wants this to return to levels it used to be, and exporters are LOVING it, tina!

"Japan's huge debt is the reason that Japan need inflation."

That's too simple. There wouldn't be such huge debt if they didn't keep printing off money in the hopes that people will buy bonds and what not. They are creating further debt that the country can NEVER repay on the gambles of this psychopath and that fool Abe. How long as Kuroda promised 2% inflation? how many times has it failed? how many times did he add more stimulus to the economy only to see it fail again? The man is in his own little world, and you and your kids and grandkids will never, ever, get out of it.

4 ( +6 / -2 )

@tina oh and how was its economy built!? domestic business is through many of the sales from parts that are made in Japan, please dont tell me its agriculture, that industry is less than 1% of the economy and consumes 6% of the annual budget, basically making it a welfare industry

1 ( +2 / -1 )

exporters are LOVING it, tina!

Right, but not many exporters in Japan now. Many J companies shifted production overseas. The importers are suffering.

how was its economy built!?

In case you don't notice, there are many domestic businesses in Japan. Japan is suffering trade deficit for a long time, especially with China. If there are no domestic businesses, how could Japan build its economy with trade deficit?

-2 ( +2 / -4 )

tinawatanabe: "Many J companies shifted production overseas. The importers are suffering."

Yes, they are outsourcing for LABOR and parts, but that does not mean the company that sells the product is domestic if it's outside Japan, nor does it mean you're paying any less for an EXPORTED, Japanese product if they've sent it from a factory in China, does it?

There are some domestic businesses in Japan, yes, but you clearly stated "Japan is not an export country" when in fact it is, and VERY dependent on being such.

3 ( +5 / -2 )

Tina

Japan has trade deficits with China because Japanese Incs are making Japanese products in China with Japanese design. However their export market is Japan. For example, Daiso is making kitchen and bathroom ware in China for Japanese taste. In fact Japanese companies are selling their products to Japanese consumers.

Japan has trade surplus with US, HK, South Korea, Taiwan and Singapore. Without these markets, Japan will become another Greece. Greece is uncompetitive like Japan. Without Germany footing the bills, Greece will not survive and Government has to shut down. Japan has no Germany at the moment. US will not become Germany for Japan because she is heavily indebted by herself. I guess South Korea may help Japan if Japan has defaulted the national debt.

http://www.tradingeconomics.com/japan/balance-of-trade

-3 ( +0 / -3 )

Right, but not many exporters in Japan now. wrong there are plenty, I for one of them. and I do much more for the J economy (bringing in much more money than I send out) than the majority of importers do. if your an importer and dont like the weak yen, well do Japan a service and sell Japanese made goods instead

-1 ( +0 / -1 )

smith

What you are describing is called Japan's investment, the local company.

heynong: "However their export market is Japan."

It's called Japan's import.

wtfjapan: " I for one of them."

it does not change the fact that Japan imports more than exports.

It is well known fact that Japan is not an exporting country. The countries like China and South Korea are exporting countries.

-2 ( +0 / -2 )

"Bank of Japan (BOJ) Governor Haruhiko Kuroda, center" He appears to be holding up well, in the face of what he really knows is going to happen. Good for him.

-1 ( +0 / -1 )

Japan's national debt is mostly owned by the Japanese, and they ain't gonna sell. Believe me. So chill and eat some sushi.

0 ( +1 / -1 )

He kinda has a point. The story of yen-dollar is more about a stronger dollar rather than a weaker yen., given that the greenback is being driven higher and higher by positive US economic data. Kuro-chan can't do much about that. Well, he could hike rates, but that requires a paradigm shift.

Against the Canadian $, for instance, the yen is basically unchanged from 2 years ago.

-1 ( +0 / -1 )

Japan's national debt is mostly owned by the Japanese, and they ain't gonna sell. Believe me. So chill and eat some sushi.

They ARE selling, but the Bank of Japan is buying it all.

Japan's national debt was also mostly "owned by the Japanese" when they had the Bank of Japan buy up all the debt the finance ministry issued back in the 1930's, and look what happened - when the people in charge at the time tried to execute an "exit strategy" from that policy, they came under severe political pressure (the finance minister was assassinated by the military who loved all the easy money).

At the end of the day, the value of people's savings was mostly wiped out at the end of that episode. All despite the debt being mostly owned by the Japanese.

Fortunately there is no rabid military now, but that doesn't mean there is no political pressure urging the Bank of Japan to keep buying up all the government debt essentially indefinitely (until things go splat again).

Just see the other recent news - the government is avoiding making politically tough decisions on reining in out-of-control spending by assuming that they are going to get lots of extra tax revenue. Well that's great isn't it.

But the problem is, Japan's real budget deficit is about 40 trillion yen - tax revenues would need to increase by nearly double to plug this gap.

They will continue to put off tough decisions, because they want to get re-elected. If the government can just have the BOJ keep buying more debt for just a little bit longer... it continues... and continues...

... and then everything goes Splat. That is what has happened in the past, both in Japan and elsewhere.

0 ( +0 / -0 )

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