41–50 of 74 posts
In 1985, USDJPY was around 250:1, why 160:1 is now a problem? With almost all of its industries no longer in a leading position, with its car industry being demolished by EVs, 250:1 is what it is heading.
Because you cherry-picked 1985. It went below 160:1 in 1986 and hasn't been back since, until now. So it's the weakest it's been in literally 40 years; that's at least potentially a big deal.
This headline is outdated. It's at 159.82 yen / usd right now.
The BoJ has to raise rates. Dumping Dollars to buy Yen is spitting in the wind.
Earlier quoted context omitted.
You could have given him the bill for his immediate expenses and later give him the difference. Or pay him a beer or a lunch to make up for it. I'd never take advantage of a friend in need like that. And as you said, "it was an easy 15 bucks". You were very aware of what you were doing: easy money off your "friend", instead of friends not minding a few dollars missing here or there.
For people I am good friends with we don't sweat owing each other 15 bucks here or there because it all evens out in the wash.
The BoJ has to raise rates. Dumping Dollars to buy Yen is spitting in the wind.
They can't afford to. At 4.5% average rates, their interest payments will consume something on the order of 80% of their government budget and huge portions of GDP. Their 30 year paper was trading at 4.1% last week. If the short end of the yield curve pumps even higher, they are utterly screwed. Consequences of 250% debt to gdp.
The US has the same problem. Maybe less extreme, but the balance sheet has tons of short-term debt, and rates aren’t cooperating.
I live in Japan and five years ago my drinking buddy at the time only had USD and was about to get on the shinkansen. He needed Yen ASAP. So he said, "dude I'll trade you a 100USD for 10000YEN." At the time it was an easy fifteen bucks or something profit after exchange, so I said, sure, here ya go. I put it in a drawer and forgot about it until a few weeks ago. I'm going to the moon with this, ladies and gentlemen
I guess it still is - it just went from 1 USD to 1 AUD to now 1 NZD :-D
The BoJ has to raise rates. Dumping Dollars to buy Yen is spitting in the wind.
If you raise JPY rates, then these U.S. treasuries are going to get liquidated driving up U.S. rates and of course the U.S. doesn't like that.
So, I believe the US is pressuring Japan NOT to raise rates, i.e. to save the U.S.'s own currency.
This is undoubtedly why Bessent bought $5 to $10 billion JPY using Euro awhile back (as rumored, the exact amount is a secret). That way he could try and bailout Japan and by using Euro instead of USD, not affect US inflation so much. He also did it without telling anyone in Europe which quite pissed them off as well.
It's really funny seeing these shenanigans take place with all the pompousness the US shows regarding its currency and how it pretends it itself is not going broke.
Earlier quoted context omitted.
You could have given him the bill for his immediate expenses and later give him the difference. Or pay him a beer or a lunch to make up for it. I'd never take advantage of a friend in need like that. And as you said, "it was an easy 15 bucks". You were very aware of what you were doing: easy money off your "friend", instead of friends not minding a few dollars missing here or there.
For people I am good friends with we don't sweat owing each other 15 bucks here or there because it all evens out in the wash.
Earlier quoted context omitted.
Because that was 1985, and this is now. Entire supply chains, input costs, planning, etc. have been built around the assumption of the JPY trading in some sort of range. Of course that will change over time, if it hasn't already. The Japanese government's messaging about this has been that they're not really worried about the currency weakening (after all they're massive net exporters! it should be a good thing), but…
Most large companies hedge their exposition to FX rates.
The BoJ has to raise rates. Dumping Dollars to buy Yen is spitting in the wind.
It's not that simple. Untold numbers of U.S. bonds are held by people running the "carry trade" (borrowing JPY at low interest rates in order to buy mostly U.S. treasuries and make money on the difference). If you raise JPY rates, then these U.S. treasuries are going to get liquidated driving up U.S. rates and of course the U.S. doesn't like that. So, I believe the US is pressuring Japan NOT to raise rates, i.e. to s…
> So, I believe the US is pressuring Japan NOT to raise rates, i.e. to save the U.S.'s own currency.
The US is pressuring the BoJ not to liquidate US debt to get the USD needed to buy Yen. It only tangentially relates to bond yields, and has nothing to do with defending the USD.
It would be better for the US if Japan just normalized rates, but Japanese politicians are resistant.