Japanese finance minister warns against excessive yen weakening

MMT in Japan. BOJ steps on the gas while MOF stumps on the brakes. Eventually somethings going break.

Thé BOJ pushing the accelerator of the jpy depreciation and inflation. And at the same time the government pressing the break and subsidizing energy price. The duo think they can perfectly control inflation , FX and interest rate at the same time. This is not possible.

When the yen breached the 145 level last September, authorities intervened

Call it what it is, currency manipulation.

Japan gives money away, FX traders know it and are buying Yen, when the government "steps in" and gives everyone free cash by buying their troubles away. So called free trade!?

"It is important for currencies to move stably reflecting fundamentals," Suzuki told reporters

The weak yen does reflect fundamentals.

What does he think printing so much yen is supposed to do?

If Saudi Arabia boosts the supply of oil that makes the price of oil drop, right.

"Sharp and one-sided moves are seen in the currency market lately.

That’s because Japan is the only one printing money willy nilly still.

If he doesn’t like the fundamentals, he can do something to change them. He is the finance minister. Slash the excessive spending and stop selling debt to the BOJ for printed money.

The government is watching currency market moves with a great sense of urgency. We will respond appropriately if the moves become excessive."

If they intervene by selling dollars / euros and buying yen, I will respond by selling some yen for dollars / euros. Intervention is a waste of our money.

I’m actually loving the falling yen

I get to invest more into Japanese assets which I usually double my money on

The only downside is that this makes me work too much

However,I’m not complaining in the slightest…

MMT in Japan. BOJ steps on the gas while MOF stumps on the brakes. Eventually somethings going break.

Nah, Modern monetary theory would entail broad based social benefits, including things like a UBI, using the power of a fiat currency.

https://spii.org.za/information-pertaining-to-the-basic-income-grant-ubi/

Instead BOJ QE is just a big subsidy for Japan Inc. and investors. With wild spending for LDP pet projects and crony capitalism, and the excuse of financial shortfalls when it comes to social benefits for the public and regressive tax increases.

https://www.spectator.co.uk/article/qe-the-ultimate-subsidy-for-the-rich/

The worst of both world for the working public.

It means their luxury items are getting more expensive, and their business buddies have been complaining a lot.

I don't see how a weak yen is any good for anyone living and getting paid in Japanese yen.

With an inflation at more than 3%. It is way above the target. Stop printing money and raise the rates for god sakes

@fxgai

The weak yen does reflect fundamentals.

No it doesn't. Japan is the darling of global investors these days, due mostly to its corporate performance and several structural factors. They LOVE Japan's "fundamentals."

"The weak yen" is actually "the higher dollar" and euro. Central banks in those places have radically hiked their rates to choke off dangerously high levels of inflation. That's not the case in Japan. The country has stayed the course because its inflation is much milder than its peers.

Given that a large number of traders are on illegal substances that’s an unfortunately apt photo choice.

@Garthgoyle

Japan was built on exports and a weak yen

Unfortunately, Japan is not producing as much as as it used to

However, my business is storming ahead as I repatriate foreign money back to yen which I reinvest by buying stock which I export…ad astra!

Oh, and next week my prediction is that the yen will be 146 yen to 1 US and nothing will be done to rectify that situation!

Suzuki knows his stuff despite being a politician. 9% is no joke. Hawaii and Guam will suffer as a result of a lack of tourists from Japan. What this article fails to mention is the influx of investors from Singapore, Hong Kong and Taiwan. People are moving their money out of those places and into Japan and the US for security due to the heinous behavior of the CCP. When the JPY gets too weak the BOJ will make a feeble attempt to 'correct' it, but due to the vast volume of wealth being traded on the Forex market, they will fail.

No it doesn't. Japan is the darling of global investors these days, due mostly to its corporate performance and several structural factors. They LOVE Japan's "fundamentals."

JeffLee,

if Japan is the darling then the yen should strengthen in response to high demand for Japanese assets, but the reverse is the case. The authorities se threatening to se scarce foreign currencies to prop the yen up. Hello.

The yen is weaker versus everything, bar the Turkish lira, not just the dollar and the euro.

Japanese assets are cheap for global investors now. That’s the prime difference between now and 15 years ago.

That the yen is stronger than only the Turkish lira should be a loud alarm bell for any Japan investor… but Japan stocks if they wish, but hedge themselves against the yen currency.

Can’t type sell and buy correctly tonight. Apologies.

i don't get. even the japanese money minister has no idea what to do to fix the problem. according to the headline, the guy is just complaining that the yen is weak. it's a pity, japanese people work so hard, so many hours (next coment will be from a japanese hater saying productivity is low)

I don't see how a weak yen is any good for anyone living and getting paid in Japanese yen

Really? USA constantly monitors and ensures trading partners aren't gaining an 'ADVANTAGE' with a weak currency, you don't see why?

Do you not appreciate that Japan is a heavily export weighted economy?

As far as I can see, it's all milk n honey for Japanese citizens AND foreign investors. Though I hope the foreign investors don't get too greedy and start demanding higher dividends as the whole house can come crashing down. Higher dividends, less money to buy government bonds, cost of government debt increase, economy come crashing down.

For those who earns yens, but have liabilities (mistress maintenance etc.) in Euros, the BoJ isn't catering for your situation, and why should they?

Yen crashing again ? That's terrible. Oh wait. I'm actually getting paid in dollar.

Let the good times roll.

Japan is the darling of global investors these days, due mostly to its corporate performance

You're confusing Japan Inc and Japan the country. Companies Warren Buffet invests in don't necessarily do business in Japan. In fact more likely than not they don't make money from Japan.

"Warn", when you can just tell the BOJ to stop printing money. Oh wait, record tax, record corporation profit, record bonus for parliaments, all as intended. 150 yen is here to stay.

First time in 24 years? I thought the BOJ intervened last summer.

Basically puts Japan on "Sale" to the rest of the world - which encourages FDI and tourism : both goals of the government and helps the economy. It can go a lot further than 145 - personally I expect the natural level for the JPY-USD pair to be in the mid-200s or even higher.

The government has been keeping the currency artificially high since the bubble burst for various reasons, but that surplus is gone and now time to get to work rebuilding the country.

https://www.macrotrends.net/2550/dollar-yen-exchange-rate-historical-chart

250 here we come.

First time in 24 years? I thought the BOJ intervened last summer.

Indeed. Re-read:

When the yen breached the 145 level last September, authorities intervened in markets to support the currency for the first time in 24 years. 

So 25 years ago now. Was Asian financial crisis back then I guess.

@Jeff Lee

The country has stayed the course because its inflation is much milder than its peers.

it has been much milder but soon may not be the case anymore. Core cpi is now 4 ％in the US and falling , Japan 3.1 % and rising. In a few month if the BOJ continue to print like crazy and the JPY to weaken we may well have an inflation above US and there will be not excuse for the BOJ for playing with fire.

@dagon.

Like socialism and capitalism, MMT in theory and practice are two different things. Whatever the theory, in practice it is just a rationale for 'spend, spend, spend' economics, to buy popularity, to buy control of industry, to buy jobs, to buy back outsourcing. For politicians, MMT is a green light to spend unlimited amounts of public money borrowed from the future, to make their ideological dreams come true, here and now, building their perfect (but dysfunctional and financially unviable) world. It will end badly for anyone who isn't rich. So not a problem for many on here. From reading the messages, this board must have one of the highest wealth demographics outside Dubai.

Their in excess of one trillion US dollar bond holdings has appreciated in value enormously from the yen they used to pay for it. Partially liquidate these and use the profits as a buffer to mitigate the effects of a weak yen. Simultaneously, signal to the speculators that interest rate rises are a policy option, with an immediate 0.5% shot across the bow. Japan’s has strong fundamentals, that are only getting stronger. Tourists are flooding back in and wage and price stability is conferring a huge advantage vis a vis its trade competitors.

Tourists coming to Japan say that everything is so cheap here, bargain basement of the world. I wonder what the J people think about this with a true 12 to 14% inflation rate, and real wages dropping like a stone?

All my funds are in Dollars and Swiss Francs. It must be the case that every foreigner in Japan hold funds in anything but the poison yen. The yen is just a total basket case now.

oh boy they're going to have a meeting! lots and lots of meetings!

Do you not appreciate that Japan is a heavily export weighted economy?

In terms of exports share of GNP, among G20 members, Japan ranks way down the list.

Zoroto

June 30 05:19 pm JST

"When the yen breached the 145 level last September, authorities intervened"

> Call it what it is, currency manipulation

Don't be silly. Currency manipulation is only what the adversaries of America do. Allies call it fiscal and monetary easing. Same with govt vs regime. Regime is only for adversaries, govt is for allies, regardless of the form.

""Japan will take appropriate steps should the yen weaken excessively, Finance Minister Shunichi Suzuki said ""

Only if the big bosses like Toyota, Honda, Nissan, and many other exporters who are making a killings approve of it.

In terms of exports share of GNP, among G20 members, Japan ranks way down the list.

This does not take into account exports from overseas operations (and repatriated profits converted back into yens).

In any case Japan is still tge world's 4th largest exporter.

https://en.m.wikipedia.org/wiki/Economy_of_Japan

I am surprised still at the desire of some here who wants higher interest rates, no where else in the world do patriotic citizens wants high interest rates.

Cost of living? Not even in SK can I get a large beef ribs and kim chi bowl for under 10,000 yens.

Cost of living? Not even in SK can I get a large beef ribs and kim chi bowl for under 10,000 yens.

You mean korean won (÷1000 = USD, as opposed to Japanese yen ÷100 = USD)?