Sunday May 27, 2012

JAPAN NEWS AND DISCUSSION

Japan to boost currency intervention war chest by Y15 trillion

Politics Sep. 30, 2011 - 05:50PM JST ( 37 )

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37 Comments

1

JapanGalSep. 30, 2011 - 03:04PM JST

Take the 15 Trillion, use it for disaster rebuilding up North, and do not raise our taxes.
0

smithinjapanSep. 30, 2011 - 03:07PM JST

And yet all this talk it being necessary to raise taxes for reconstruction?? So where's THIS 15 trillion going to come from??
0

kurisupisuSep. 30, 2011 - 03:13PM JST

Is this Japanese QE ?
-1

sswaySep. 30, 2011 - 03:15PM JST

The reconstruction is MEANINGLESS if the area will be contaminated by Fukushima Daiichi. The reconstruction should wait until the situation at the reactor site is fully settled and a proper nation wide check can be completed.

If the result is bad the money should then be spend on Decentralization to the south of Japan. The stupidest thing would be to reconstruct and then find out it is no longer habitable. That would be $$ down the toilet. I do not put it past the Japanese government as they are already intent on spreading the contamination nation wide.
0

weedkilaSep. 30, 2011 - 03:26PM JST

smithinjapan -- So where's THIS 15 trillion going to come from??

The government takes out a loan from the central bank who digitally print it from nothing. Basically it's just an entry on a computer terminal and the taxpayer later pays it back with interest. This is how money comes into being, ie; through debt. May be hard to believe but if you look into it you'll find it's a ponzi scheme. That's why there is always a need growth and more money - to keep the thing going! I probably go on about this but it's important. The following animation explains it all with quotes straight from the bankers mouths.

http://www.youtube.com/watch?v=Dc3sKwwAaCU
0

smithinjapanSep. 30, 2011 - 03:31PM JST

weedkilla: "Basically it's just an entry on a computer terminal and the taxpayer later pays it back with interest."

I did not mean where is the physical manifestation of it going to come from or anything, but of course that we'll end up having to pay for it, while discussions of how to pay for all the reconstruction are still ongoing and with no clear end in sight.

Thanks for the link... I'll check it out a bit later.
0

crustpunkerSep. 30, 2011 - 03:45PM JST

phew! Now Japan can FINALLY get back to pouring concrete over everything, building tetrapods that destroy the natural beauty of the seaside, constructing hideous gargantuan monuments (also concrete) and other such very very important projects! disaster....AVERTED!
0

marcelitoSep. 30, 2011 - 04:05PM JST

What a load of crap...they need to raise eveyones taxes because supposedly there is no other way to secure money for Tohoku and yet they just go on announcing new spendig measures in other areas..today it's for future unilateral currency interventions ( which won't be effective just as they weren't the past few times) and I just read that the budget requests from various govt ministries are higher again go next financial year despite being directed to cut by 10% acros the board...The politicians and bureacrats really don't give a toss about the little guy and are over the moon they can use Tohoku as an excuse to get more money for their pet useless projects.. guess we were all too naive to believe they were really going to cut waste first as promised...
0

beangrySep. 30, 2011 - 04:12PM JST

"Azumi added that the ministry will require currency traders to report daily their trading positions for another three months beyond the end of September in a bid to deter speculative moves."

An admission that they don't know IF or how much speculation there is, so te following statement is misleading"

"warning it will act against speculative moves on the yen." kind of difficult to complain "speculation" is the cause when they admit not having he stats.

Enough with the nonsense: it's not speculation, but rather investors turning away from the dollar and going to "safe haven" currency, something the yen has been for years. Thank your buddies in DC with QE2. Last year they tried to blame china but it didn't work, turned out the Japanese were lying about that too.
1

Jared NormanSep. 30, 2011 - 04:19PM JST

print ¥150trillion and make $1 = ¥100
1

Jared NormanSep. 30, 2011 - 04:20PM JST

besides the $10trillion of debt with the japanese govt can be paid off
0

weedkilaSep. 30, 2011 - 04:32PM JST

beangry,

There is no safe haven currency left, even the Swiss franc is now going the way of all other currencies. They tell us the yen is strong but how can that be with all the QE going on? It's just that the Fed is the worst offender. I've read that Japan started its QE program after its economic bubble burst in the 90s. (Had to save the banks somehow.) The yen looks strong but really it's just stronger in comparison to other weaker fiat currencies. Basically they're all being printed into oblivion. That's how I understand it anyway.
0

kurisupisuSep. 30, 2011 - 04:45PM JST

It is interesting to think that Japan can act to manipulate the world

The world vs Japan in the currency markets - I know which I would back
0

The Munya TimesSep. 30, 2011 - 05:30PM JST

What a terrible waste of money for a temporary solution that only brings about more speculation on the banking sector and the currency market where Japan eventually will lose the battle. Trust in power and money policy motivates them while they are missing the necessary capabilities to carry on with the intervention and the fight till they win. They won't as they disregard many of the causes that led to this unfavorable situation. This amount should be enough to be invested in the other segments of the industrial and economic life of Japan in order to solve those problems that created this situation. This money could have been used better.
0

ubikwitSep. 30, 2011 - 05:42PM JST

smash, crush and decimate the speculator parasites.

i don't understand how anyone living in japan, with its heavily export dependent economy, can be against trying to keep the balance among exchange rates, especially in light of the recent DRASTIC measures taken by the swiss.

the more japanese exports suffer, the further the pain will extend into the economy, maybe having a direct impact on YOUR JOB.
0

tokyokawasakiSep. 30, 2011 - 05:46PM JST

Azumi added that the ministry will require currency traders to report daily their trading positions for another three months beyond the end of September in a bid to deter speculative moves.

What?

Are they really that naive? They have no control whatsoever over the currency traders in every other country who will be drolling over this news and just waiting to line their pockets. Why does Japan always announce their plans. Do they not know anything about trading? This move will make a fortune for many overseas currency traders, and within a few weeks the Yen will be back at around the 76 level.

Madness, absolute madness.
-1

some14someSep. 30, 2011 - 06:07PM JST

This move will make a fortune for many overseas currency traders, and within a few weeks the Yen will be back at around the 76 level.

Madness, absolute madness.

exactly, this how j-economy has been damaged steadily and systematically over a period of two decades.
-1

JapanGalSep. 30, 2011 - 06:22PM JST

Do you think anyone in the govt. reads are well rounded thoughts and solutions here?

Nope, they are getting ready for another beer garden right now.
-1

gogogoSep. 30, 2011 - 06:43PM JST

Why do you think the currency is being bought? Because investors know Japan does this and publically talks about it before they do it... you might as well burn this money
-1

gogogoSep. 30, 2011 - 06:58PM JST

Are they really that naive? They have no control whatsoever over the currency traders in every other country who will be drolling over this news and just waiting to line their pockets. Why does Japan always announce their plans. Do they not know anything about trading? This move will make a fortune for many overseas currency traders, and within a few weeks the Yen will be back at around the 76 level.

100% correct!
0

FoxieSep. 30, 2011 - 06:59PM JST

So, exactly when will that happen?
0

beangrySep. 30, 2011 - 07:23PM JST

WeedKilla@'

I like this comment, as it pretty much sums up what they're doing:

"..The politicians and bureacrats really don't give a toss about the little guy and are over the moon they can use Tohoku as an excuse to get more money for their pet useless projects.. guess we were all too naive to believe they were really going to cut waste first as promised..."

That's what it is behind all the pretend they suddenly care for people they poison with radiation. As to Japan's currency being so high is is precisely because of QE that no one wants to buy the dollar (keeps being devaluated), so to have a stable investment that leaves the yen, euro, pound and little else. But Europe is no better off, and china can't fill the gap - yet. Hence the commodities and metals -gold is at 1500 USD! Japan is still a safe bet they figure, and until the demand for yen decreases there is little he Japanese can do but print money and cause inflation. With employment at 4,3% they can't do too much or they risk lowering it even further (they don't want to do that).

I didn't see he link, but I suppose they're talking about printing; it's a repeat of the 30's.
-2

herefornowSep. 30, 2011 - 09:57PM JST

as they disregard many of the causes that led to this unfavorable situation. This amount should be enough to be invested in the other segments of the industrial and economic life of Japan in order to solve those problems that created this situation. This money could have been used better.

The Munya Times -- absolutely. Proves conclusively that Japanese politicians and bureaucrats have no real ability to control their own economy, so they have to resort to these kinds of wasteful and largely inefficient measures to try to prop-up the large exporters. Get the money out of the Japan Post savings accounts, and into consumer spending, and the exchange rate becomes a non-issue since domestic demand increases. But, that can't happen, since the government needs to borrow those funds to pay for its other spending. Japanese economy is just spinning its wheels.
-1

kansaifunSep. 30, 2011 - 10:04PM JST

This is the most expensive toilet flush - Y15 trillion - in the history of the world...
1

kchozeSep. 30, 2011 - 10:14PM JST

First, this isn't really a "cost" like spending on disaster areas, the money is printed from nothing. Why do they do it for those interventions and not for real spending? Because as long as the printed money stays on the financial markets, it will not increase inflation. If a government spends money in its economy that it creates out of nothing in any quantity, it increases inflation because there is more money in the internal cycle of the economy. That being said, Japan could deal with a bit of increased inflation, but anyway, orthodox economics say that this is a bad thing.

Second, I don't think it will really work, the Japanese politicians aren't going big enough. The markets work with expectations, so if the Japanese government fixes a limited amount of money for currency intervention, then the markets will just ignore those interventions. They know that it's just a "limited deal" and will not take it under a lot of consideration.

Think about it, if two stores next to one another sell the same product at the same price, let's say 10 000 Yen. If one store announces that it will sell the current inventory at 5 000 Yen before returning to the normal price, will the store next to it lower the price to 5 000 Yen? Of course not. Of course they're not going to sell their product while the other store sells their current inventory, but when the inventory runs out, the price will return to 10 000 Yen, and nothing will change. If, on the other hand, the store announces a permanent price decrease to 5 000 Yen, then the other store will follow the price decrease, or it will never sell that product again.

The only way to really affect the value of the Yen is to go out strong and claim that you will act in an unlimited manner, printing as much money as you have to, to make sure that the Yen stops appreciating and to reduce its value to a more acceptable level. If you do that, the markets know that whenever they buy Yen at a higher price than what the government is willing to provide it at, they will lose money, because the government will just print Yen and undersell them, so that they won't find any buyer for their Yen, unless they sell it at a lower price than the government.

This is what Switzerland did, and it worked for them. Japanese politicians have to find their balls and do the same thing, or their interventions will not make a dent in the overvaluation of the Yen.
1

kchozeSep. 30, 2011 - 10:33PM JST

@beangry

You say that the reason why the Yen is increasing is because QE has devalued the dollar. That's not correct. The Yen has appreciated versus most currencies, not just the American dollar. For example, Canada has not done any quantitative easing, nor is it in the mess that Europe is, yet the Yen has gained a lot on the Canadian dollar and is still gaining. Meanwhile, the American dollar has actually increased in value recently, gold and silver on the other hand have fallen in the last few weeks.

The fact that unemployment is 4,3% has little to do with Japan's ability to influence its currency's value. Intervening on international markets also don't necessarily mean that inflation will increase. The link between inflation and exchange rates isn't 1:1.

I didn't see he link, but I suppose they're talking about printing; it's a repeat of the 30's.

Would that it were... the Great Depression was as bad as it was exactly because countries still had the gold standard and couldn't print money. This meant that, because of falling demand, prices fell, but because prices fell, that meant that money was appreciating, which is the worst thing it can do, because people then start stockpiling money for its own value instead of spending it on products or services, or investing it in the economy. Dropping the gold standard and starting to print money was the precursor to the recovery in most, if not all, countries. It wasn't the only element, but it was a big one. Because, yes, there was a strong recovery in the 30s. There was a serious recession in the early 30s, 1930, 1931, 1932, but the late 30s had great economic growth in most countries, with falling unemployment. We talk of the Great Depression as lasting until WWII only because the recession was so severe in 1929 to 1933 that it took years of an economic boom to eliminate the aftereffects, not because the economy kept getting worse during all that time.

If countries did what they did in the late 30s, then things would be better.
0

TumbleDrySep. 30, 2011 - 11:00PM JST

J Gov and BoJ are still after empty threats. That is not the first one. The half life of each intervention was shorter than the previous one.

"warning it will act against speculative moves on the yen."

Until now, what were "investors" doing?
0

weedkilaSep. 30, 2011 - 11:06PM JST

@beangry

I like this comment, as it pretty much sums up what they're doing: "..The politicians and bureacrats really don't give a toss about the little guy and are over the moon they can use Tohoku as an excuse to get more money for their pet useless projects.. guess we were all too naive to believe they were really going to cut waste first as promised..."

So if the politicians and bureaucrats don't give a toss about the little guy who do they work for? Seriously. (George Carlin once said it's a big club and you're not in it.)

Why is it that politicians (or the economy) always need more money for "their pet useless projects"? Crustpunker (3:45) put it well. But why?

so to have a stable investment that leaves the yen, euro, pound and little else.

Good luck if you are investing in those currencies.

I suppose they're talking about printing; it's a repeat of the 30's.

What is happening is more than a repeat of the 30s, actually it's worse. Or maybe better in a way, depending on how you look at it. The present system is unsustainable and imploding. That's the reason for all the QE; inflate, inflate, inflate to keep the sinking ship afloat. Don't mean to be negative, it's just how it is.
-1

kurisupisuOct. 01, 2011 - 01:00AM JST

Might be an idea to hold several ounces of precious metals ; if we see yen inflation then that would be a hedge against against it...........
0

ubikwitOct. 01, 2011 - 01:08AM JST

let's get a little more ambitious japan!!!

i say 50 TRILLION!!!

smash the market!!!
-1

ubikwitOct. 01, 2011 - 01:09AM JST

SMASH!!!!
0

oberstOct. 01, 2011 - 01:27AM JST

And yet all this talk it being necessary to raise taxes for reconstruction?? So where's THIS 15 trillion going to come from?? ............................................

probably from taxpayers in Japan.
0

oberstOct. 01, 2011 - 01:34AM JST

the yen’s strength also makes foreign purchases more attractive for companies wishing to expand overseas..............................................

use the strong yen to buy Nokia( disclaimer, i am a shareholder, LOL ), get back into the game of making smart phones. Can't bloody let the Yanks and the Korean to dominate that market, can we ?
-1

DisillusionedOct. 01, 2011 - 04:37AM JST

Anybody that truly knows the Japanese knows they are just plain 'ketchi' (stingy). And, seeing them shell out yen for any reason is news worthy. The displaced residents of Fukushima and Sendai have got bugger all from the J-gov, but the j-gov is more than willing to shell it out to make themselves look rich. Put your money where your mouth is and support the people in need, butt wads! Japan's national debt is the greatest in the world, but they keep telling everyone how Japan is a rich country. Bullsh!t!!!
1

BANNLARROct. 01, 2011 - 05:57AM JST

The Japaneas Yen is way over valued as a currency when looking at the Yen Chart, the Finance minister is right because the rest of the Major ecconomies are gettting into the cusp of recession mode. I think Japan will have to do what the Swiss did, peg to their neighbors Euro. Getting too strong a Yen is not good for Japan the exporting nation. I think the second tsunami the ecconomic one will hit hard if Japans finance minister does not act soon. Everything needs to be in balance in this ONE WORLD ORDER if for example, you export to countries like the debt bomb USA and Europe. So the 15 Trillion Yen is good and more if they can do it. I think Japan will be looking at a new Finance minister getting appointed if the Yen's strength is not curbed. Please don't get mad at what I have posted, I live in the US and have always been interested in the Asian culture. Please go lightly on the comments. Thank you
-1

The Munya TimesOct. 01, 2011 - 10:00AM JST

Get the money out of the Japan Post savings accounts, and into consumer spending, and the exchange rate becomes a non-issue since domestic demand increases.

@herefornow

A very important point you made. Consumer spending and the creation of the consumer society raised Japan to a high and competitive industrial and economic level and helped to keep the fine balancing on the export market to helping to keep the yen low with high salaries and high domestic consumer prices. Now they seem to abandon the Yellow Brick Road for an endless tightrope walking by killing the goose that laid the golden eggs

But, that can't happen, since the government needs to borrow those funds to pay for its other spending. Japanese economy is just spinning its wheels.

Exactly. Or could even we say; for their own personal spending?
0

ubikwitOct. 02, 2011 - 12:29PM JST

japan is already well on board the consumerism ship, which is why raising the consumption tax, especially in the form of a VAT tax, would be effective..

on the other hand, the japanese still have enough depth in their culture that rampant consumerism is tempered by the sense of the need to save for the future. that is why that tool of the usa--koizumi--at the behest of the global financial cartel, was trying to destroy the postal savings system. TAX THE FINANCE INDUSTRY.

this nonsensical idea that promoting consumerism instead of taxing the ill-gotten gain of people who acquired excessive and unearned wealth by paying lobbyist to subvert the regulatory system sounds like PROPAGANDA sponsored by the finance industry.

with millions of truly hapless "consumers" getting knocked about on the stormy seas of unemployment in the usa--and elsewhere--the suggestion that consumerism is the answer to the depression caused by in criminal negligence on the part of government to fulfill its regulatory role, which in turn was brought about by the malfeasance of the FINANCE sector is LUDICROUS.