Japanese gov't intervenes to stem yen's rise against dollar

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  • 0

    globalwatcher

    All world currency hawks were reading the sign yesterday and set up their computers to short against the YEN today. Japan needs to learn to do this very quietly and swiftly. More bumpy road ahead.......Good luck.

  • -2

    tokyokawasaki

    How much did they waste on the trade this time?

  • -4

    gogogo

    I hope you all bought yesterday and sold today.... this is a license to print money when governments do this.

  • -5

    iraira

    and we're already back to 77.05 yen/$......

  • -2

    southsakai

    I use PPL quite a bit. Just checked right now and it was 74.90 yen/$.. - a few days ago it was 75.55 yen/$..

  • 0

    namabiru4me

    gonna be a long time before the 100s come back...

  • 1

    Papigiulio

    can someone explain in layman's terms how on earth this intervention works?

  • -2

    some14some

    Waste of money, now Yen will strengthen further in coming days.

  • -2

    cactusJack

    78.85 right now (11:53 AM)

  • -1

    rainman1

    @Papigiulio: Very simple. Bank of Japan, probably with help from the US Federal Reserve, buys US Dollars vs Selling Yen, to weaken the Japanese currency, making Japanese exports cheaper for consumers overseas.

    @iraira: We've been nowehere near 77.05 post 11AM this morning.

  • 1

    octopussy

    can someone explain in layman's terms how on earth this intervention works?

    They sell yen and buy dollars.

  • 0

    ExportExpert

    This intervention is akin to pissing into a hurricane, the japanese need to PRINT more yen to bring it down.

  • 2

    ExportExpert

    However the short window created by this intervention allows large corporations time to repatriate some funds at a better rate, other than that it means nothing and will have zero effect.

  • 0

    digiridoo

    It's only good as long as we the people don't continue to buy and sell in these currencies!

  • 7

    lucabrasi

    Which tosser thumbed-down Papigiulo for asking a perfectly reasonable question? We're not all economics experts... I certainly ain't.

  • 0

    iraira

    Yeah, it shot up after I posted (or after I saw it as) 77.05yen/$1....hence, don't follow any financial advice I offer....or any Las Vegas style bets I suggest making.

  • 0

    Elbuda Mexicano

    Wow! Expert Export took the woods right of my mouth! Akin to pissing** into a hurricane!! Omg!! So funny but so true!!!!****

  • 0

    Farmboy

    If you're sending US dollars, you can still get the 10 a.m. rate until 3 p.m. some places, maybe the post office.

  • -1

    rainman1

    @southsakai: Just to be clear, we are referring to the spot rate here. It has not been below 76.25 post war. I'm not sure who PPL are but they are ripping you (I think you'll find that was the TTB rate too) off whoever they are. Citi are a point around spot all day long.

  • -1

    wiley34

    I dont get why they never learn. This intervention is like throwing money into the garbage.

    To get a more long term effect, you need to take advantage of the situation.

    1) import import import, lots of products. Having the Earthquake, it can really help to get lots of products in for north east japan. Anything from food to construction supplies. at 77yen a dollar, Japan is rich in a way of importing.

    2) For Companies, Importing can become quite expensive, because they dont have the money, companies will be encouraged to borrow from banks. Here, government intervention could be to fix the bank rate for the companies, so that companies can borrow and we will have more circulation.

    3) minor interventions can also be on the import taxes, not necessarily an effective long term move, but a short term move could benefit the country.

    This will increase the money supply of yen and the yen will stabilize to a 90s level, where then the government could intervene with some sort of control policy over the currency like they have in Korea or China(bad example, but still)

    We are not suppose to see the level go back to 100 again, but the new stable price would be perhaps a nice 91-95 level with highs and lows of 96 and 88. The fluctuation of the yen will also be wider than narrower due to the government board being unstable untill Japan stabilizes the government body.

  • 0

    southsakai

    @rainman1AUG. 04, 2011 - 02:38PM JST southsakai: Just to be clear, we are referring to the spot rate here. It has not been below 76.25 post war. I'm not sure who PPL are but they are ripping you (I think you'll find that was the TTB rate too) off whoever they are. Citi are a point around spot all day long.

    Thanks Rainman, yeah very true indeed. PPL is actually the #1 online global payment processor run by eBay if you know what I mean :), unfortunately JT forbids me from writing that word. But yeah I know I'm getting a terrible rate. I do a lot of freelancing and get paid in $ so it's hurting big time. I better start looking for a job locally, if only I can find one lol

  • 0

    MAYGO13

    About time too. Still more needs to be done if Japan wants to export more. pre 2008 when yen was 240 to the pound 1,000,000 yen was approx £4,000.00 so today or yesterday! 1,000,000 yen @ 124 £8,000.00 its not hard to see why us importers need this so badly. Come on Japan get jiggy with it and get exporting again!!!!!!!!!!!!

  • -1

    rainman1

    @southsakai: I hear you. I know a lot of people paid here in Dollars who have suffered since the end of 2008 with the strength of the Yen. Foretunately, most of them do have a cost of living adjustment. You should still be able to get a better rate doinbg it therough the banking system though.

  • 0

    some14some

    Windfall Profits for Big Businesses...they must have covered Forward Exchange for six months.

  • 0

    tian4670

    Sounds familiar, this is also called currency manipulation - according to big brother.

  • 0

    cactusJack

    79.94 at 18:41

  • 0

    cactusJack

    80.20 at 19:09....whatever it is, it is working!

  • 0

    some14some

    What's the impact on TSE? Hardly any.

  • 1

    Mark_McCracken

    How much did they waste on the trade this time?

    There are readers here who can do a much better assessment than I, but very roughly estimating, they reportedly spent a trillion yen, and lost about 5% of the value making the trade, so that would be a loss of 50 billion yen, or $625 million dollars. On the other hand, the value of the US Treasury bonds that Japan holds rose by 5% against the yen, so that is 5% times $912 billion dollars, an increase of $45 billion dollars. Again, others here will be able to give you a more complete answer.

  • -2

    SamuraiBlue

    To be precise, Japan didn't "lose" anything since in selling the yen they bought US dollars which will be placed in the reserve.

  • 1

    Serrano

    It would be a lot simpler and fairer if everyone used Federation credits.

  • 0

    octopussy

    In an effort rein in the appreciating currency , Japan sold one trillion yen ($12.5 billion) Thursday, driving the yen to a three-week low of 80.20 per dollar from 77.10 per dollar.

    Would be nice if the European Central Bank would buy a few bonds. They are the reason for the appreciation of the yen recently.

  • 0

    globalwatcher

    US economy is not doing very well as expected, thus DOW broke technical level yesterday. Do not forget the US QE 3 has not been ruled out by FED while EUROzone is doing much much worse than the rest of us. It is very critical Japan pays attention to every detail what's going on in global economy.

  • 0

    BurakuminDes

    Yikes - Yen has now risen back to 78.8 per dollar! This is purely a band-aid measure, as we all know. It didn't work for long after they intervened after March 11...and it won't last long now. Market forces will always win out in the end. I can understand the gloom and doom among all the Japanese export companies though...

  • 0

    globalwatcher

    Most importantly, we are now in MARKET CORRECTION.

  • 0

    wnagler1

    The Government's intervention is good for Japan's export oriented and international businesses, but it is a short run tactic.

    If Wall Street and its currency trading partners believe the dollar is only worth 75 or even 70 Yen, then that is where the exchange rate is headed.

    Currently the futures markets are indicating the Y/Dollar FOREX rate will stay where it is through the December http://futures.tradingcharts.com/marketquotes/J6.html

    However, the March 2012 futures are not trading actively at this time as I would bet that traders are highly uncertain.

  • 0

    GW

    If japan wants to lower the yen they shud print up enough yen to pay for recontruction in Tohoku, that way they pay for whats needed(without nailing us, the people), if the rest of the world dont like they can beg the yen, lowering its value, which is what Japan wants, kill two big birds with one stone! And they shud toss me enough to pay off my mortgage for this advice!

  • 0

    globalwatcher

    wnagle1, we are heading to global slowdown for the next 18 months. That's what I forsee based on charts and geopolitics..

  • 0

    globalwatcher

    Before closing all my postings on this topic, I hope everyone who has been advocating with CHINA to promote a concept of "ONE ASIA".

    Please learn from the mistake of ONE EURO today. NO European countries can get along as far as rescuing Greece, Italy, Spain, Iceland and Portugal. It never worked and never will.

    If China falls, is Japan ready to rescue China? Japan needs to stay firm to be independent player in global economy. Japan should not throw away tools of monetary and fiscal policies to China.

  • 0

    Jeffrey Duelley

    I wonder how long it will be until I start seeing topics like this on gold and silver instead of government promises (paper money).

  • 0

    sfjp330

    U.S. actually has less influence on the strong yen. The main cause is China buying record amount of Japanese Bonds making Yen even stronger. However, Japanese cannot buy Chinese bonds. This is a one way street rule set by China. The Japanese goverment has to restrict Chinese purchase to a manageable level.

  • 0

    globalwatcher

    sfjp33o, I agree with your post. I go even further, we need to keep pressuring China to go to the currency floating system.

  • 0

    globalwatcher

    Even though I have a strong principal of "let the market decide" in economics, the BOJ did a wonderful job today to remove an opportunity (intervenes) from the worldwide hawks to YEN.

    World investors no longer find a safe haven to park their money on Yen. Everything went to the south; gold, silver, copper, soybeans, crude oil, worldwide equity market. The biggest problem of market melt down is caused by EUROZONE. Stay defensive, Japan. More decline is on the horizon.

  • 0

    some14some

    If China falls, is Japan ready to rescue China? Japan needs to stay firm to be independent player in global economy. Japan should not throw away tools of monetary and fiscal policies to China.

    Wonder if Japan has any means like 'tools and fiscal policies' left, its China who is now strong enough to ignore Moody's and decide's its Dragon rating for the USA even. Summary : Too late to contain China now.

  • 0

    globalwatcher

    China who is now strong enough to ignore Moody's and decide's its Dragon rating for the USA even. Summary : Too late to contain China now.

    Sounds good. Let's sit down and talk about the currency issue seriously.

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