Dollar hits new 20-month high, passing 85 yen

That's one hurdle down. Keep on weakening Yen. Japan needs you to get above 100 yen to the dollar.

As prime minister in 2008-2009, Aso launched a series of economic stimulus packages worth hundreds of billions of dollars to prop up Japan’s long-struggling economy. Hmm. Didn't work then...................................ah, what the heck! Let's try it again.

As Prime Minster Abe stays in office, I`m sure the Yen will eventually become 150 Yen to 1 dollar. In my opinion, Prime Minister Abe will not do much in the area of really fixing Japan. He will probably do more talking than anything else before he thinks about resigning again.

WELL . .unlike So Korea (Hyundai/ Samsung) and USA (General Motors)- Japan has NOT poured funds or bailed out their auto industry, or any other industry , to stabilize or salvage it from liquidation . . . . . . . .Regulating the YEN is the smart way to go in an internationally tenuous monetary climate..

dances a jig

If nothing else, now Japanese companies can have some profits and pay some taxes. Good for Japan!

Green PandaDec. 26, 2012 - 10:18AM JST

That's one hurdle down. Keep on weakening Yen. Japan needs you to get above 100 yen to the dollar.

Why, who is going to benefit?

OnniyamaDec. 26, 2012 - 10:35AM JST

As prime minister in 2008-2009, Aso launched a series of economic stimulus packages worth hundreds of billions of dollars to prop up Japan’s long-struggling economy. Hmm. Didn't work then...................................

Exactly.

semperfiDec. 26, 2012 - 10:48AM JST

WELL . .unlike So Korea (Hyundai/ Samsung) and USA (General Motors)- Japan has NOT poured funds or bailed out their auto industry, or any other industry ,

Where were you, when MOF bailed out Japan Airlines? Where are you, when MOF is basically bailing out Sharp? The one thing you did get right is that Japan is not pouring funds to bail out any industry. The Japanese government is just pouring in funds, via the backgate, to bail out specific companies.

The first effect we will notice is an increase in the cost of fuel, food and just about everything else we buy. Even if it is made in Japan, many of the components will have been imported. The net result is that we will all, with the exception of certain politicians with strong connections to industries such as construction, be poorer.

This represents a devaluation of the currency. Years ago when this was done in Britain, the then Prime Minister said that the pound in our pocket would not be affected by the devaluation: we soon learned it was as the country rapidly became poorer and the economy worse.

Our purchasing power of imported goods has been effectively reduced by 20%. That may not make us 20% poorer, but it will soon become noticeable.

As imported fuel will become more and more expensive, it will give the government an argument to switch back to nuclear power, thereby making Japan a more dangerous country.

Well said, gaijintraveller. Couldn't agree more. Surely SOMEONE will profit, but it won't be us!

WELL . .unlike So Korea (Hyundai/ Samsung) and USA (General Motors)- Japan has NOT poured funds or bailed out their auto industry, or any other industry ,

Ever hear of TEPCO?

Japan is already screwed with the strong yen, i'm all open for alternative economic methods. As Asia in general is still at an unprecedented growth period, demand for high tech/manufacturing goods are still high, a weaker yen policy could help boost the export which create jobs.

STRONG YEN-cheap products from oversea......in exchange for local jobs. You may feel the higher purchasing power now, but in the long run, you'll be poorer without further incomes. WEAK YEN-everything is pricier; however, many are able to keep their jobs. It may be hard toward your pocket in a short run, but you are sure to have a stable job with stable incomes in a long run.

i'm all for the weaker yen, 100-120yen/dollar (around 2008 value)is pretty decent.

WEAK YEN-everything is pricier; however, many are able to keep their jobs. It may be hard toward your pocket in a short run, but you are sure to have a stable job with stable incomes in a long run.

It's psychological as well. The weaker yen though will make exports more attractive but imports like OIL will become much more expensive and further hurt the economy. At least with a strong yen the imported oil needed to run the power plants is cheaper, but you'll see the nuclear reactors restarted too to cover the energy needs.

The average consumer is going to get hurt with higher food prices for imported goods and increased domestic prices because the already over priced local products are going to go even higher because of higher fuel costs. The adverse ripple down effects make it prudent for the short term to keep the yen at under 100 to the dollar.

Sounds like a few are ready and want to be poorer. Amazing. Only Japan.

"The average consumer is going to get hurt with higher food prices for imported goods and increased domestic prices because the already over priced local products are going to go even higher because of higher fuel costs. "

yes, i too think that that prices will go up when the yen get lowered. However, this could bring up inflation, which is what Japan experience ONCE during the Koizumi administration in the last 20 years. Hyper inflation is a problem but with 2-5% annual inflation, it could increase spending and create more jobs (hey, i learned this from college and all the babbling on US Presidential debate on how to create jobs) Even without the export growth, a weaker yen could bring back some low margin manufacturing jobs that are in overseas due to the living standard of other Asia nations are rising, and thus their wages. There is a chance here, we don't know if it it will turn out to be good or bad, but there is a chance, much better than the persistently strong yen that actually do more harm than good to the folks.

"Sounds like a few are ready and want to be poorer. Amazing. Only Japan."

We young folks, Japan future, are already HECKA POOR. Unlike you old folks who saved up enough during the bubble years and enjoying the endaka moments, we have no job and income stability. Basically when we turn to old folks like you, we would be screwed even more than now if this trend is continuing. So rather than waiting for that to happens, we need CHANGE (oops, American Liberals).

but being "poorer"? i'm not so sure about this. You and me are no econ expert, but consider these:

Within Asia, two countries can be said which devalued their currencies the most are Korea and Vietanm. The Korean Kwon was 400 to $1 in the early 90's to 1075 to $1 now, but their living standard has improved vastly. Vietnamese Dong was 10k to $1 in the 90's and now 21k to $1, but also, their gdp has gone up 5 times.

On the other hand, with the persistently strong currencies such British Pound and EU, do you think they are wealthier now compared to before?

of course there are also countries that flourish even when their currency goes up. Take China for an example, the Yuan at 6.2 to $1 now compared to 10 yuan to $1 2 decades ago. However, we have seen how strong yen and it simply didn't work for the J econ growth.

To sum it up, we are POOR WORKING CLASS YOUNG PEOPLE who want CHANGE, unlike some RICH FOLKS here.

ps. to be RICH FOLKS you don't actually needs to be a millionaire, all you need is a stable job with annual saving. What an extravagant thing for us young folks who only got low paid jobs.

stephen424Dec. 26, 2012 - 03:35PM JST

STRONG YEN-cheap products from oversea......in exchange for local jobs. You may feel the higher purchasing power now, but in the long run, you'll be poorer without further incomes.

The non tarrif barriers / merchandise licencing laws of Japan always have ensured that the Japanese consumer was never going to feel the benefit of a cheaper Yen with imports. The profit margin of the traders and the limited retailers were the ones who benefited. European wines consistently stayed at the same prices, Aussie beef even got a little more expensive and US cherries were still 4 times the price paid in the USA.

stephen424Dec. 26, 2012 - 03:35PM JST

WEAK YEN-everything is pricier; however, many are able to keep their jobs. It may be hard toward your pocket in a short run, but you are sure to have a stable job with stable incomes in a long run.

Yep, those Japanese oil workers must be breathing a collective sigh of relief and the Japanese gas line workers will be painting the town red tonight. As for those 100s of 1000s of car manufacturers who lost their jobs to the manufacturing hallowing out, well they'll be down the Nissan and Toyota factories after the New Year's holiday.

Reality check for you sir because you obviously have some serious misconceptions about Japan.

The only way 80 year old Farmer Hiroshi and his 70 year old trader son in law, Makoto, are realisticly going to pass on their jobs to their kin, is if they increase productivity. Since there is neither the will nor the way, the Yen might well go to Y300, but Japanese domestic production in many of its present industries will still be condemned to the historical dustbin of human financial wastage.

As for the Japanese oil and gasworkers, I think I've met 1 in the last 20 years in Japan.

As for those manufacturing jobs, well a majority of them were actually lost before the Yen crossed the 100 to the dollar rate, around Y115 to the dollar to be exact, and although Koizumi delayed it for a while, playing with the employment laws and benefitting from the Chinese boom, they were always going to go and they will go yet, no matter how Abe plays with the nation's finances. Only a miracle increase in Japanese productivity would hold out a hope that they could stay in Japan and anyone who has ever worked for any considerable time with the Japanese knows that productivity is not a strong point.

The sad truth is that the Yen could hit Y140 to the dollar and we'd be walking around with funny money in our pockets, outside of Japan and the USA (Remember the dollar has still some way to decrease to other world currencies before the Federal Reserve will ease up on QE) and the Japanese worker/consumer will still be worse off than he was before December 26th 2012.

The only benefits will be felt by the big multi-nationals, when they repatriate foreign profit and going by the last time they were flushed with cash, 2002 - 2008, their workers are not going to feel any of the benefits in their wage packet.

stephen424Dec. 26, 2012 - 06:40PM JST

Within Asia, two countries can be said which devalued their currencies the most are Korea and Vietanm. The Korean Kwon was 400 to $1 in the early 90's to 1075 to $1 now, but their living standard has improved vastly. Vietnamese Dong was 10k to $1 in the 90's and now 21k to $1, but also, their gdp has gone up 5 times.

stephen424Dec. 26, 2012 - 06:40PM JST

Within Asia, two countries can be said which devalued their currencies the most are Korea and Vietanm. The Korean Kwon was 400 to $1 in the early 90's to 1075 to $1 now, but their living standard has improved vastly. Vietnamese Dong was 10k to $1 in the 90's and now 21k to $1, but also, their gdp has gone up 5 times.

I'm in Ho Chi Minh City right now, like I am for business, every year for the last 12 years. And the multi-nationals maybe richer and the tourists maybe happier, but the general city populace are lot poorer than they were 10 years ago. I just got an air conditioned taxi to drive me all around District 1 looking for pirated software for $2, while 3 years ago it cost me $5. The only thing that has gone up for the locals in the last 10 years are the basic foodstuffs and resources.

As for Korea, I suggest you do some basic background research. South Korea has the biggest inequality of wealth distribution in the whole of Asia AND IT'S GETTING WORSE WITH EACH PASSING YEAR.

I don't think you could have picked 2 worst examples in Asia.

Stephen424, old folks are not all millionaires, but it is good to hear your voice.

Remember that most old folks save for two reasons.

One is to make sure they will be all right in those post-retirement twenty or thirty years when they are old and weak, unable to work and increasingly vulnerable, but more so, they hope to pass their savings on to people like you one day.

GO GO YEN ! I am so happy

If the yen goes back to 100 YEN per 1 USD, you will see a youtube video of me running nekkid and dancing in the streets

Just this recent small devaluation of the Yen by 4-5 yen has been huge for my business. I can actually give higher bonuses to my employees for this year end

And trust me inflation isn't going to to affect people who don't over consume, and who actually save their money or invest it to get a higher return.

Plus in the past 4-5 years since the yen has dropped by 20-30%, I haven't seen a a 20-30% price drop on food or gas or other basic needs. Things are still just as expensive in Japan today as they were 4-5 years ago. It still costs me 9000 YEN to fill up my gas tank every week, it still cost me 40000 yen to have Xmas dinner at the same restaurant as 4-5 years ago. My electric bill is still the same as well, as are all other bills

So yeah, i'd rather have the 100-110YEN per 1 USD again please...k thx

semperfi--WELL . .unlike So Korea (Hyundai/ Samsung) and USA (General Motors)- Japan has NOT poured funds or bailed out their auto industry, or any other industry , to stabilize or salvage it from liquidation .

The US Big Three bailout is an ongoing story. So far the result are moderately good and much of the loans are paid back. Killing an industry that has subsequently shown it can fairly recover made no sense, as well as the huge cost of unemployment benefits and other social costs that would have been doled out if the Big Three and their sub-contractors had been allowed to die as Tea Party anarchists wanted.

http://www.politifact.com/truth-o-meter/statements/2012/mar/21/barack-obama/president-barack-obama-campaign-video-says-auto-co/

Different strategies work for different national economies. The hand-up that was extended to the US auto industry and some banks in 2008 has so far worked in good fashion and the US taxpayer continues to be reimbursed . The drop in the value of the Yen, if sustained, is also projected to make US auto manufacturers a bit more profitable than Toyota due to its heavy reliance on overseas sales. Cheers to Japanese monetary easing policies!

This post is for Dog

"The non tarrif barriers / merchandise licencing laws of Japan always have ensured that the Japanese consumer was never going to feel the benefit of a cheaper Yen with imports. The profit margin of the traders and the limited retailers were the ones who benefited. European wines consistently stayed at the same prices, Aussie beef even got a little more expensive and US cherries were still 4 times the price paid in the USA."

I think you mean a STRONGER YEN. Because, with a cheaper yen, those things will be even more pricey. Even so, we do see a vast expanding movement of 100 yen shops and cheap manufacturing imported goods (uniqlo, cheap electronic devices all over Akiba).

"As for the Japanese oil and gasworkers, I think I've met 1 in the last 20 years in Japan."

who are you comparing to? Japan to USA perhaps? wait, Japan have never been famous for its oil and gas........Is there still any remaining for production? or do you mean the oil distillery industry??? you confused me here.

"The only way 80 year old Farmer Hiroshi and his 70 year old trader son in law, Makoto, are realisticly going to pass on their jobs to their kin, is if they increase productivity. " "As for those manufacturing jobs, well a majority of them were actually lost before the Yen crossed the 100 to the dollar rate, around Y115 to the dollar to be exact, and although Koizumi delayed it for a while, playing with the employment laws and benefitting from the Chinese boom, they were always going to go and they will go yet, no matter how Abe plays with the nation's finances. "

The farm industry in Japan is by no mean for mass production as of that of the USA. Even when the yen get cheaper, that mean pricier food import, which give J farmers a competitive edge, they will still not lowering any prices if not to increase along with inflation. Times have changed, the purchasing powers are increasing in Asia as whole, not only China. Demand for Made for Japan goods are also increasing. This is one benefit that Japan has during the 70's and 80's export of quality goods to these countries. If 10 years ago, J brands goods were sought, People didn't mind if the J goods were actually made in China or elsewhere; however, things have changed now. Take Canon for an example: Japan made models are specially a favorite of foreign tourists even though prices are 20-30% pricier than foreign made. Still, the persistent strong yen is doing no goods at all for business.

"The only benefits will be felt by the big multi-nationals, when they repatriate foreign profit and going by the last time they were flushed with cash, 2002 - 2008, their workers are not going to feel any of the benefits in their wage packet."

Indeed but not at all really, small and medium size manufacturing firms will also be benefiting. In most countries, small and medium size firms are the actual backbone of the country. I'll say this outloud, most J multi billions, multi national corps are a bunch of non-innovative old timers that are waiting to meet their end. On the other hand, many small and medium size firms are fabulous in term of new style managements and innovations. Especially those small firms; however, what cheap import and strong yen basically kill off their competitive edge. You mentioned that you are in a business trip so i figure that you also have an understanding about business dealings, negotiations, and profit margins.

"I'm in Ho Chi Minh City right now, like I am for business, every year for the last 12 years. And the multi-nationals maybe richer and the tourists maybe happier, but the general city populace are lot poorer than they were 10 years ago. I just got an air conditioned taxi to drive me all around District 1 looking for pirated software for $2, while 3 years ago it cost me $5. The only thing that has gone up for the locals in the last 10 years are the basic foodstuffs and resources."

Sir, i feel sorry for you since you got ripped off big time here. Pirate softwares do not cost more than $1 for the local, and prices haven't changed for the last few years. So basically you are lucky this time since you get ripped off less than the last time. As for other things, beside Food, i can use one word to tell you, it's COMPETITION. As the market is more opening as year pass by, more business pop ups and bring more competition to lower the prices.......it's econ 101. Foor food supplies, it's not VN but the entire world is facing a food shortage now.

You said people are poorer, let's put this list:

10 years ago, only the rich can afford computers. Now, almost every family in big cities has at least one. 10 years ago, cell phones were luxury goods (remember the hecka old Nokia 1100 something? it costed $400 then). Now, cell phones are regular goods, unless it's newest models. Tablets are also popular as well. 10 years ago, the majority only able to afford chinese made Honda copied bikes. Now, Honda Viet made bikes are popular, and the entire industry is estimated at 4 millions/year. 10 years ago, PPP was $2100. Now is $3800.

"As for Korea, I suggest you do some basic background research. South Korea has the biggest inequality of wealth distribution in the whole of Asia AND IT'S GETTING WORSE WITH EACH PASSING YEAR."

wealth distribution inequality has nothing to do with a standard of living. Just because one group is super rich, and another is super poor doesn't mean standard of living is lower. Don't rule out the importance of the middle earners yet. Income inequality is mainly use for social managements, not the standard of living. My original post was about standard of living. Why don't you look up and see what Korean could afford then and now?

"Remember that most old folks save for two reasons.

One is to make sure they will be all right in those post-retirement twenty or thirty years when they are old and weak, unable to work and increasingly vulnerable, but more so, they hope to pass their savings on to people like you one day."

Also please remember that if i don't have a stable job, income, and saving now. I'm screwed now, and more so in the future. Then how can i MAKE SURE that i WILL BE ALRIGHT IN THOSE POST RETIREMENT TWENTY OR THIRTY YEARS when i'm OLD AND WEAK. and how do i HOPE TO PASS my SAVINGS ON TO my offsprings?

are you happy with the current Japan? old folks did their best to build up the country, and we thanked them for that. However, this is the youngster generation nowadays, and we can't feel the prosperity that the old generations enjoyed then. Useless politicians, obsolete business models, and weak spirited citizens. This country is hopeless.

I just hope there is an OBAMA in Japan.