Noda says Tokyo closely monitoring U.S. debt talks

"...the yen climbed to 78.39 to the dollar,..."

Yikes!

And is Yoda watching the stronger yen allowing for Japanese companies to buy overseas raw materials at ever and ever cheap prices?

I hate one way articles.

The fact the Japanese Finance Ministry is monitoring a crisis situation is news? Evidently they don't monitor the US economy as a matter of course. Well now I can sleep easy, the government is in control.

How exactly BAD is a "strong yen"?

Thank you Goddog

That's what I keep telling my friends and wife but they look at me like they are seeing a ghost. They are probably losing money because of that but the cost of raw materials are priced in dollars so they make a killing with that and the rest of the currency loss will be offset by the people in Japan who never get to see/enjoy the benefit of a stronger yen unless they go abroad.

It is funny to see 200 grams of US cherries for 395 yen while people in the US get about a kilo for that price and the Italian spaghetti is still 248 yen for 500 grams the same as 2 years ago. As a matter of fact,we still pay 200-400% more for any food item and 30-50% more for electronic appliances.

And we're still in a recession,how can they justify these prices.

JT should report on this and not just the other side of the story

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Not only that - since the Chinese Yuan is pegged to the dollar, it means cheaper components for Japanese assembly and cheaper products for Japanese consumers. I agree with other posters: focusing only on the downside is harmful.

Even FRB Chairman Ben shalom Bernanke may not be monitoring 'so closely' ! Noda should relax, evenif there is delayed action from the US side (very unlikely) it will not have an additional harmful effect to Japan's economy.

@some14some

it will not have an additional harmful effect to Japan's economy.

Really? I know nowt about economics, I freely admit. But the UK Business Secretary said only last week that

"the biggest threat to the world financial system comes from a few rightwing nutters in the American Congress."

Is he wrong? ( I don't mean about the "nutters" bit, I mean the "threat to the world financial system" part.)

This is great news for the hordes of Japanese heading to Hawaii and the mainland States in Obon! Dirt cheap holidays! However, Japanese export companies - ie the mob who drive this economy - will be petrified. Expect the Japanese central bank to intervene again, as they did after 3/11, if the Yen drops even further.

But the UK Business Secretary said only last week that

it is like former UK PM Tony Blair who was supporting US media over WMD threat. Shrug off, nothing of that sort is going to happen with World Economy.

if the Yen drops even further.

Rather, if the US dollar plummets even further!

Noda will only intervene if the yen spikes higher quite rapidly, IMO. E.g. maybe a 2.5% move higher in a day would probably trigger solo intervention.

Last year I believe they intervened mostly to show the market that a Kan govt would not be afraid to do so (the market had seized upon some Kan comments perceived as "pro strong yen").

And it took a nasty spike in the yen to all time highs against the buck and other currencies in March to get them to intervene then, with aid from their G7 buds.

IMO they regard a steady rise in the yen against the dollar as having to be tolerated, even if they will voice off about it in an attempt to prevent excess volatility. After all the yen isn't especially strong against other currencies such as the Aussie or Kiwi, it's only against the big basket case currencies (USD, EUR, GBP) that there is yen strength.

China is the biggest buyer of Yen and what is their true intentions behind purchasing large sums of Japanese government bonds? The large purchase by China is causing the rise value of the Japanese yen. China continues to yen-buying spree, which has helped drive the yen higher, making Japanese goods less competitive with China's and other major trading partners. China can buy Japanese government bonds while Japan can’t buy theirs. Japan needs to discuss fairness with Chinese goverment. Japan should stop selling bonds to China until they open up the sale to Japan.