Yen weakening may prove debilitating blow to Japan

Japan intervened in the currency market after the yen breached 145 to the U.S. dollar in September

Japan was removed from a U.S. watch list that monitors trading partners for potentially unfair foreign exchange practices

How can these be in the same article? Japan intervenes and then gets off the list of currency manipulation?

"positive for some sectors but negative for others."

Lemme translate it for you: positive for rich, negative for poor.

Believing that YEN won't depreciate further it's like believing that Santa Clause exists.

Sell your YEN until you still can!

"The dollar staying around 140 yen is already a headache for many Japanese firms, particularly importers," he added. "Inflation may slow, but relative price levels will be high, and this is a severe blow to households."

The yen was around 130 just over a month ago, now it's at 143 to USD and this guy says that inflation may slow? Pigs may fly.

Yen level should had never been so high compare to the dollar and euro. Economic zones comparison shiws the yen needs to drop even way more, as when some 40 years ago.

Why a dropping population of 123 millions persons would be an economic zone as important as 350 for the USA or the Eurozone ?

All was enable by zero rate for too long time. Now the wind will be blowing in opposite way for long long time.

Yen weakening may prove debilitating blow to Japan

And by stated design.

When will the LDP and Japan Inc. have to take responsibility for decades of policies that have been arrows aimed at hobbling the Japanese working class and extracting as much as possible from their shrinking wealth?

Yen weakening may prove debilitating blow to Japan

Why surprise this is by design, right?

Never had such a high monthly return since I began trading on the TSE. That being said, unstable currency is not good at all, and saying that this situation is "good for some sectors and bad for others" is rather naive.

For a country that imports 65% of its food, the people are getting screwed,

99% of its fuel is imported, ouch

inflation is 2% right Kishida?

The yen is 130 to 1 USD right now, I don't remember it ever reaching 143 this year

"positive for some sectors but negative for others."

Amazing analysis skills, totally deserving the position that he is holding.

The cascaded weakening of JPY is a design by LDP and their lackeys at BOJ to bring Japan back to the " good old days" with cheap labor that supports an internationally competitive export sector. It is designed to make the business owners rich at the expense of the workers' buying powers. Business owners will make the same old excuses as to why they are cautious of increasing spending and raising wages all the while turning record profits and hoarding it to raise the prices at the stock market. It's been working so far. This may however lead to yet another asset price bubble and the subsequent crash will be the final nail in the coffin of the Japanese economy.

For a country that imports 65% of its food, the people are getting screwed,

Yup and its going to get worse.

I remember thinking it was over late last year. Things got better faster than expected. I don't know how, I don't know why, but here are my fingers, crossed once again.

"The yen is 130 to 1 USD right now, I don't remember it ever reaching 143 this year"

You better check today's rate then , its 143.5 to USD as I write this.

Jonathan PrinToday  07:01 am JST

Yen level should had never been so high compare to the dollar and euro. Economic zones comparison shiws the yen needs to drop even way more, as when some 40 years ago.

Why a dropping population of 123 millions persons would be an economic zone as important as 350 for the USA or the Eurozone ?

All was enable by zero rate for too long time. Now the wind will be blowing in opposite way for long long time.

Doyou really believe that a sound and strong economy can be built on a melting currency? If you want a sound economy look at Switzerland. They have the strongest currency in the world and yet their exporting companies are doing great. Why because they have to adapt to be able to remain competitive despite a strong currency .

La vie douceToday  08:31 am JST

"The yen is 130 to 1 USD right now, I don't remember it ever reaching 143 this year"

You better check today's rate then , its 143.5 to USD as I write this.

seems your phone is broken. Getting a new one will cost you a fortune with the JPY at this level!

"positive for some sectors but negative for others."

Amazing analysis skills, totally deserving the position that he is holding.

The cascaded weakening of JPY is a design by LDP and their lackeys at BOJ to bring Japan back to the " good old days" with cheap labor that supports an internationally competitive export sector. It is designed to make the business owners rich at the expense of the workers' buying powers. Business owners will make the same old excuses as to why they are cautious of increasing spending and raising wages all the while turning record profits and hoarding it to raise the prices at the stock market. It's been working so far. This may however lead to yet another asset price bubble and the subsequent crash will be the final nail in the coffin of the Japanese economy.

I rarely quote and post: Spot on! Amazing post!

But you just about summarized the modern Japanese political economy.

It is Neo-feudal and engineered to the detriment of the working class.

The US dollar is about to TANK with countries joining BRICS and OPEC moving away from the US dollar. I think that around this time next year, we'll be seeing the Yen at around 110 to the dollar.

I am in Japan but hold zero yen.

It was all converted to foreign currencies a long time ago

The writing was on the wall that Japanese authorities wanted inflation and the easiest way to do that was to debase the yen

Its not as if they didn’t warn us…

kurisupisu

I am in Japan but hold zero yen.

> It was all converted to foreign currencies a long time ago

> The writing was on the wall that Japanese authorities wanted inflation and the easiest way to do that was to debase the yen

> Its not as if they didn’t warn us…

So how do you pay your bills? Buy food and pay for transport. I have a dollar account but daily life requires yen.

Japans BOJ waits around for the economy to suddenly shift in its favor for no particular reason. It’s like that kid who is waiting for their dad to comeback from the store when he went out to buy cigarettes… 35 years ago… he’s not coming back Japan, he’s got a new family now, take the hint

rolf, the exchange rate is awesome, buy 2 get one free.

This is just the interest rate differential, which must be higher than its ever been.

Hands up everyone who wants to pay 6% on their mortgage? No, me neither. I don't like food going up, but it beats paying double for our house.

History repeating itself! Self inflicted with no exit strategy. All thanks to Kuroda's money printing

@wallace

Just go to the post office and take out what

I need from my foreign accounts

For big purchases (cars etc) I just remit to companies that are used to dealing internationally

Its all pretty simple

Bank of Japan Governor Kazuo Ueda has been taking a neutral stance on the yen's fall of late, calling it "positive for some sectors but negative for others."

Bank of Japan Governor Ueda left out one group that maybe maters the most, the heavy burden that has fallen across the citizens of Japan who are seeing costs rise on nearly everything from food, fuel, electricity bills and everything else needed by a household which in the end may come back to bite corporate profits and the economy when people start tightening their purse strings as a result!

Larr Flint

Sell your YEN until you still can!

Easier said than done for people who live here and require yen for said life.

Yen weakening may prove debilitating blow to Japan

You said the same thing last, yet the economy is booming

the importance of stable currency moves that reflect economic fundamentals, the yen's recent weakness is largely due to the divergence of monetary policies between Japan and its peers in the United States and Europe.

If the central bank prints tonnes of yen that finances out of control government spending, its weakening versus other currencies does reflect economic fundamentals.

You can have a stable currency from your side of the ledger once you stop doing policies that destabilize the currency.

This list shows that Japan is not that big exporter of goods/services to the world as it is always said:

https://en.m.wikipedia.org/wiki/List_of_countries_by_trade-to-GDP_ratio

Imports to Japan are slightly higher than the exports.

So, is it really the case that Japan profits from a rapidly depreciating Yen? I cannot imagine…

Maybe this is just another excuse for year long failed monetary policy experiment and poor variety of alternatives left.

I was shocked when I made an exchange rate of my monthly wage in Euro and noticed that my income which is average here became extremely low compared to a northern european one (germany-denmark)

The BOJ is doing an excellent job in sending this country into poverty.

@wallace,

As for myself, I have a small proportion of my money in yen, but as for the wealth I set aside for the future - that is not in yen.

My philosophy is not to have all my eggs in one basket. My home egg is in this Japan basket… but for the eggs I can have in another basket, I feel it makes sense to indeed have them in that other basket, and have now to good effect for many years.

Everyone is free to make their own decisions for their own circumstances. Good luck!

Russia's war in Ukraine have meant higher fuel costs. Adding to the woes of resource-poor Japan is the yen's recent depreciation.

Adding meaningless antirussian sanctions.Just to add and stay on topic.

we are heading to 150jpy area again.

question to journos-did you ever asked Mr Kishida what have happened to piles of cash used for making yen stronger last years autumn when rate came to 150JPY?it seems that measure "did work well"?

if we are talking about stable Japan under LDP leadership it may be as long as you dont leave Japan for a few days or week two.Than you feel reality through your own pockets when you account all costs in JPy and get shocked.

On one side Japan is expecting foreign population to come to Japan but with meager wages and weak yen there is hardly any motivation for foreigners to migrate to Japan especially when they need to support families back home in native country or have future plans to go back to their country one day.

Secondly local households are already facing heat of inflation which is much much more then 2 percent quoted by BOJ or Finance ministry.

This seems to be more like nexus between corporate (mainly export oriented companies) and government at the cost of common citizens in Japan.

That’s a useless discussion. If poor or rich, for most people all the things they really want or work hard for or might feel to need immediately, are highly probable out of reach anyway, so it’s of no influence if the currency is weak or strong. You will see and experience yourself, that you always have got not or not enough of it. It has nothing to do with the currency value when you can’t afford imported cheese, someone else a rental apartment in Tokyo or again another one the Ferrari car he had dreamed of since childhood. They all have those limits regardless if the currency has a higher or lower value or buying force.

The yen is 130 to 1 USD right now, I don't remember it ever reaching 143 this year

hit [F5] and you should see today's rate

As for myself, I have a small proportion of my money in yen, but as for the wealth I set aside for the future - that is not in yen.

My philosophy is not to have all my eggs in one basket. My home egg is in this Japan basket… but for the eggs I can have in another basket, I feel it makes sense to indeed have them in that other basket, and have now to good effect for many years.

Everyone is free to make their own decisions for their own circumstances. Good luck!

that makes sense, hence why your name is fxgai! :)

SDCAToday 01:22 pm JST

The yen is 130 to 1 USD right now, I don't remember it ever reaching 143 this year

hit [F5] and you should see today's rate

Bank I use showing rate 142.50JPY for TTB 1USD and 144.50JPY for TTS 1USD

https://www.smbc.co.jp/ex/ExchangeServlet?ScreenID=tento

fxgai

@wallace,

As for myself, I have a small proportion of my money in yen, but as for the wealth I set aside for the future - that is not in yen.

Do you mean dollar accounts in Japan, or accounts in the US?

I guess you are paid in dollars when most are not.

My philosophy is not to have all my eggs in one basket. My home egg is in this Japan basket… but for the eggs I can have in another basket, I feel it makes sense to indeed have them in that other basket, and have now to good effect for many years.

What about gold?

at this moment the dollar-yen is 143.54.

As an retired American in Japan....Yahooo'

but the government will step in an things will reverse in the future

but in the meantime, car export companies are very happy and have lots of pull in the government

If you do a little Technical Analysis on the USD vs JPY chart, and charts don't lie because they are showing you where people are buying and selling both past and present, the Monthly chart looks like a huge inverse head and shoulders pattern going back to 2007 that broke out over the neckline of 125-128 area back in April of 2022, then retested it in February of this year, bounced, and then continued higher. Take away all the Macro FUD and everyone's opinions as to why and how and just look at that chart, very simple TA of a very common chart pattern on a large time frame. We should retest the 148-150 area and the market will decide there, whether to bust threw that resistance or to come back down again. No predictions from me, just watching what it does when it gets to the big levels and then play it accordingly.

Well, with all the semi-conductor factories being set up here and there they're going to be wanting a low yen.

You said the same thing last, yet the economy is booming

The economy is booming? Maybe the stock market is, but certainly not the economy as a whole. Have you noticed the empty store fronts, office buildings? Have you been on a train lately with its empty advertising slots?

The economy is definitely not booming in Japan.

Swings and roundabouts.....

Those with exceedingly generous trust funds in UK pounds are not complaining about 181 yen to the pound!

@wallace,

Do you mean dollar accounts in Japan, or accounts in the US? 

I mean mostly in things that are unhedged to the value of the yen, eg foreign securities and yes some foreign bank account type of thing, although I am not a US person.

I guess you are paid in dollars when most are not.

No I get most income in yen, so my cash flow is mostly in yen, but my invested wealth is almost entirely not. Fortunately a lot of what I was invested so far was when the yen was stronger, so it’s disconcerting to see the value of the yen go down, diminishing my buying power.

What about gold?

Yes, I have some gold exposure in my portfolio, I could say.

fxgai

ok got it.

You are paid in yen but invest overseas in nonyen accounts.

thank you

@Eastman - if you are using a bank which quotes you 2bp wide,,,stop using them.

Unfortunately, facts are facts and the yen is facing steep pressure down

A currency that has been dependent on a strong export economy has been neutered by outsourcing and there isn’t an alternative to replace it

It is the contemptible LDP that has allowed this to happen and as there isn’t any signs of change then expect the situation to get worse

Inflation in America is also high. Democrats are debasing the dollar as fast as they can.

Mr Kipling

Same for me, I’m loving the current exchange fate and hoping the rate goes higher for GBP. Have to enjoy it whilst it lasts haven’t you? What am I like, eh.

I can use some of that devaluation when I buy my yen from dollars.

Swings and roundabouts.....

Those with exceedingly generous trust funds in UK pounds are not complaining about 181 yen to the pound!

At least one thing you do not have to complain about as a UK person these days

Exporters are enjoying the weakening of Yen

As well as business that cater mainly to tourists