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US Treasury undertakes historic intervention in yen market

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Re: US Treasury undertakes historic intervention in yen market

#51

Post by inigyou »

hilariously wrote: post #30
deadbabe wrote: post #21

Earlier quoted context omitted.

You can’t have competition forever. At some point someone wins decisively, and then there is only the illusion of competition.

We already have anti-trust and other regulation to manage this problem, we simply need to use it. There's no end of competition, the world changes, companies bloat and make bad choices, smaller competitors can react and change faster - it's only in our corporate hegemony that we don't consider that a viable alternative.

End of antitrust is the decisive victory.

Re: US Treasury undertakes historic intervention in yen market

#52

Post by Schiendelman »

bilsbie wrote: post #10

Can anyone steel man the “this isn’t a big deal” side of this? On x and reddit all I see are sky is falling posts.

Hold on there. The reason you mostly see sky is falling posts is that those get more engagement, both positive and negative. "Everything is fine" doesn't cause a reaction in a reader.

This is inherent to social media. It's bad for us, too, because it eventually tricks our brain into thinking the sky is always falling, no matter how we try to talk ourselves out of it.

Re: US Treasury undertakes historic intervention in yen market

#53

Post by timr »

xbmcuser wrote: post #45
timr wrote: post #36

Earlier quoted context omitted.

No. That has nothing to do with this. Setting aside the obvious fact that the BOJ does not buy oil, they’ve been engaged in a (futile) currency defense scheme since long before the Iran conflict. This is purely about the interest rate spread.

It is not completely but part of the reason Japan wants to defend it's currency is inflation because of increase in energy prices.

In the sense that weak currency makes everything you buy from foreign partners more expensive, sure.

The place where you go wrong is drawing a straight line to the US actions in Iran. They’re not directly connected.

Re: US Treasury undertakes historic intervention in yen market

#55

Post by crypttales »

timr wrote: post #36
inigyou wrote: post #24

Earlier quoted context omitted.

Japan has to sell off its bonds to get dollars to buy oil with since oil is so expensive. I wonder why that happened.

No. That has nothing to do with this. Setting aside the obvious fact that the BOJ does not buy oil, they’ve been engaged in a (futile) currency defense scheme since long before the Iran conflict. This is purely about the interest rate spread.

[dead]

Re: US Treasury undertakes historic intervention in yen market

#56

Post by inigyou »

Supermancho wrote: post #29
inigyou wrote: post #26

Earlier quoted context omitted.

Because then the world's largest economy suddenly needs to de-lever to afford the oil you made more expensive. The USA government will enter a debt-interest spiral if Japan sells its bonds. There will be no recovery from that besides, maybe, hyperinflation through printing away the debt.

> The USA government will enter a debt-interest spiral if Japan sells its bonds. Regardless if they sell all their bonds this second or not, the US spiral is a foregone conclusion.

If Japan sells all its bonds, it happens right now.

Re: US Treasury undertakes historic intervention in yen market

#57

Post by eszed »

Aboutplants wrote: post #39
CamelCaseName wrote: post #35

Wait, no way! Someone posted a zoomed up photo of a US official (can't recall who) of a notepad a few days ago saying "To do: Buy Yen 5Y - 10Y" or something similar

Which is hilarious because 5-10 billion dollars worth of Yen is not going to do much in the grand scheme of things. It’s a speed bump not a stop sign.

I believe that would mean 5-year or 10-year, as in the terms of the bonds. No amount disclosed.

Re: US Treasury undertakes historic intervention in yen market

#58

Post by timr »

heisenbit wrote: post #41

Propping up the yen may be more helpful for the US than if Japan hikes interest rates which is on the table (Google ’bring money home‘). The carry trade buying treasuries with debts incurred in yen has been a steady source for US funding. Eventually it will happen with collateral impact on treasury rates but this ‚supportive‘ move may just shift it past November.

Yes. Let’s not forget that the last time the BOJ hinted at rate normalization, it caused a global bond market freakout, a spike in Treasury rates, and a collapse in Asian stocks (the “BOJ Shock” of December 22).

One can make a reasonable story that this led to the SVB collapse.

Re: US Treasury undertakes historic intervention in yen market

#60

Post by timr »

dredmorbius wrote: post #48
timr wrote: post #36

Earlier quoted context omitted.

No. That has nothing to do with this. Setting aside the obvious fact that the BOJ does not buy oil, they’ve been engaged in a (futile) currency defense scheme since long before the Iran conflict. This is purely about the interest rate spread.

Investor fears about rising oil prices and how Japan’s Prime Minister Sanae Takaichi can afford her fiscal stimulus plans recently pushed the yen towards 40-year lows From TFA.

That line is worth exactly as much as the daily financial news quote “explaining” why the stock market wiggled in a particular direction yesterday.

All of those things have some impact on “investors” thinking at all times. They do not uniquely explain the current events. Japan has been defending the yen like this since at least 2022.

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