51–60 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.
USD is falling vs euro so EURJPY is even more bleak. USD in general during those times was way stronger than it is today so those numbers are meaningless.
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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.
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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…
It’s true that the carry trade unwinding suddenly would be…traumatic (and debatably the root cause of the rate spike that killed SVB a few years ago), but it could be managed gradually, and must be done to bring Japan back from the brink. > 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 b…
If the US is not trying to defend the US dollar, why'd they use Euros and not USD to prop up the Yen, and also why surprise everybody doing so?
And, if it is better for the US if Japan normalized rates, then why did the US buy yen at all? According to you, just telling Japan to raise rates would be better, right?
Earlier quoted context omitted.
It’s true that the carry trade unwinding suddenly would be…traumatic (and debatably the root cause of the rate spike that killed SVB a few years ago), but it could be managed gradually, and must be done to bring Japan back from the brink. > 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 b…
The carry trade hides a lot of US debt, too. Why would the US only care about the US debt held sovereignly by Japan and not by the banks and hedgefunds executing the carry trade? If the US is not trying to defend the US dollar, why'd they use Euros and not USD to prop up the Yen, and also why surprise everybody doing so? And, if it is better for the US if Japan normalized rates, then why did the US buy yen at all? Ac…
> If the US is not trying to defend the US dollar, why'd they use Euros and not USD to prop up the Yen
Because that was the legal facility open to them. They used a foreign currency reserve that they had the ability to trade.
> And, if it is better for the US if Japan normalized rates, then why did the US buy yen at all? According to you, just telling Japan to raise rates would be better, right?
Yes. Go re-read my comment: Japanese politicians do not want rates to go up. It’s like a cornerstone of current LDP policy.
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That's the wrong read. It's more that it's easy to understand. "I will give you a 100 dollar bill, please give me a 10,000 yen bill."
Does seem within the range of “hit me back when I see you next week, buddy” though.
If the guy was so hot to not lose a dime, he could have said, “Loan me 10k yen right now, I will pay you back ASAP”.
If the guy is in Japan with American currency, he likely knows the exchange rate and exactly the terms he was getting.
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
Who charges their buddy 15 USD exchange fees on 100 USD? :(
(For example, I noticed that if I buy something from Amazon or try to pay for something using Paypal, the exchange rate they offered me is consistently worse than the market rate if I elect to pay with USD instead of JPY. The difference often adds up to a few dollars, even accounting for foreign transaction fees that my bank might charge.)
Defending currency has to have some quip, right? Something like, "The market can remain honest longer than your central bank can stay solvent"? Always seems to go wrong. Like spraying water on a forest fire with a straw.
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The carry trade hides a lot of US debt, too. Why would the US only care about the US debt held sovereignly by Japan and not by the banks and hedgefunds executing the carry trade? If the US is not trying to defend the US dollar, why'd they use Euros and not USD to prop up the Yen, and also why surprise everybody doing so? And, if it is better for the US if Japan normalized rates, then why did the US buy yen at all? Ac…
The carry trade does not hide public US debt. The US Treasury is concerned about Japan because it’s like the first or second largest holder of Treasuries in the world. > If the US is not trying to defend the US dollar, why'd they use Euros and not USD to prop up the Yen Because that was the legal facility open to them. They used a foreign currency reserve that they had the ability to trade. > And, if it is better for…
I never wrote it hides the debt, it borrows JPY at a low interest rate and then buys U.S. treasuries at a higher interest rate, making money on the difference.
> Because that was the legal facility open to them. They used a foreign currency reserve that they had the ability to trade.
Again, why not use U.S. Dollars? And again, why not at least give a heads up to the Europeans? You are not directly addressing my questions.
> Yes. Go re-read my comment: Japanese politicians do not want rates to go up. It’s like a cornerstone of current LDP policy.
No, you re-read my comment that you just slapped into your response and then completely ignored. WHY DID THE US BUY YEN AT ALL? You are ignoring my point and just restating your conclusion.