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Yen tumbles vs. dollar. What to make of this?

Why? How come? It will help Japanese exporters, but hurt importers, if I've got that right. Right? Why is Kuroda buying Japanese bonds like a madman? inflation is at 1/2 percent, I just heard on Bloomberg. Implications?

Comments

  • Also, if yen strengthens, is FXY a buy?
  • edited March 29
    carew388 said:

    Also, if yen strengthens, is FXY a buy?

    The operative term there is “IF”.

    I’ve never had any luck playing the currency markets. If I understand @Crash correctly and their inflation rate is 1/2 % (0.50%) than I do understand the money printing going on and the intentional weakening of the Yen. They see it as a way to prevent slipping into a deflationary environment.
  • a-ha. :)
  • edited March 30

    Currency War - from Wikipedia

    Thought I remembered something about this from history class. ISTM the financial plight of some European nations (Germany in particular) led, albeit indirectly, to the outbreak of WW II. Some of this financial weakness stemmed from the harsh terms imposed on Germany at the conclusion of WW I. Generally, what goes around comes around.

    “Historically, competitive devaluations have been rare as countries have generally preferred to maintain a high value for their currency. Countries have generally allowed market forces to work, or have participated in systems of managed exchanges rates. An exception occurred when a currency war broke out in the 1930s when countries abandoned the gold standard during the Great Depression and used currency devaluations in an attempt to stimulate their economies. Since this effectively pushes unemployment overseas, trading partners quickly retaliated with their own devaluations. The period is considered to have been an adverse situation for all concerned, as unpredictable changes in exchange rates reduced overall international trade.” (Wikipedia Excerpt)

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