The yen is down... Buy, buy, buy!!!

[clem24]

As of this morning, had dropped to about 93/94JPY -> $1 CAD/USD (from about 80Y -> $1 just a few months ago?). Just in time for some nice releases. :D

[Ochanomizu]

I think yen will drop to past 100.

[Mudkip Orange]

I think yen will drop to past 100.

 

'bout effing time.

[Ochanomizu]

The problem is actually not Yen.  The problem is US$ too low.  Yen has maintained consistent level with other major currencies.  I think America must look within to solve this complex problem.

[Mudkip Orange]

The problem is actually not Yen.  The problem is US$ too low.  Yen has maintained consistent level with other major currencies.  I think America must look within to solve this complex problem.

 

Absolutely, 100% not true. Over the last 10 years the Euro and the Dollar have consistently tracked each other at about $1.30USD=$1.00EUR. The Pound Sterling fell out of the sky during the crisis so that where before 2008 it took $1.95 to buy a pound now it only takes about $1.50. Meanwhile the yen, which had been about 100-110 to the USD before the crisis, just blew up to where last year we were touching 75 yen to the dollar and Carlos Ghosn was threatening to shut down all domestic Nissan production. The only currency the Yen has really stayed "consistent" with is the Aussie Dollar, which is currently trading at 28-year highs.

 

If anything the USD needs to come down a bit, so we can tweak the balance of trade and bring down unemployment more. Meanwhile if Europe hadn't gone all-in on a single currency, you'd see Iceland levels of devaluation in the PIIGS while the Deutschmark appreciated even faster than the Aussie Dollar. But alas...

[Ochanomizu]

So sorry Mr Orange, but I disagree.

 

The USD/EUR rate has varied by 50% over the past ten years: http://www.xe.com/currencycharts/?from=EUR&to=USD&view=10Y

 

The situation today is but a reflection of poor economics and bad governance of western nations.

 

By your own admission, America's solution is to manipulate the global market to benefit itself.

[Mudkip Orange]

Yeah, and Abe's stated intent to whip deflation (and devalue the yen in the process) is designed to boost the Japanese economy through both internal investment and export-led growth. Now, certainly, someone with an interest in a strong yen could kvetch that Japan is "manipulating global markets to benefit itself" but this is stupid. We could all stand to benefit from a little bit of currency war right now, especially the Euros.

 

http://krugman.blogs.nytimes.com/2013/01/11/is-japan-the-country-of-the-future-again/

http://krugman.blogs.nytimes.com/2013/01/18/shinzo-and-the-helicopters-somewhat-wonkish/

http://krugman.blogs.nytimes.com/2013/02/04/rate-expectations-wonkish/

[Mudkip Orange]

BUY MOAR TRAINZ:

 

http://www.washingtonpost.com/business/japan-central-bank-to-double-monetary-base-bond-maturities-aiming-at-2-percent-inflation-goal/2013/04/04/e54b7098-9ce5-11e2-9219-51eb8387e8f1_story.html?hpid=z3

 

Haruhiko Kuroda is my homie.

[Densha]

Yeah I saw it on the morning business news, the yen -> euro exchange rate lowered by 1% so far.

[Mudkip Orange]

I'm still blown away that someone would say:

Yen has maintained consistent level with other major currencies

 

So I'm back with some graphs.

 

[Mudkip Orange]

Here's what's self-evident. Before the crisis, the US dollar was slooowly getting weaker. You can see how the Euro, the Pound, and the Aussie dollar all track down. But the yen was actually getting weaker faster than the US dollar.

 

Then the crisis hits, and everything got thrown caddywhompus. Note how the exchange rates go almost vertical in the second half of 2008.

 

After the crisis, the dollar, euro, and pound have all been stationary. Only the Aussie dollar and the Yen saw massive appreciation. Now, Shinzo and Haruhiko are fixing that. Australia's not, but Australia has seen over 2% real GDP growth since the end of the crisis, and Aussie unemployment is holding steady at 5.4%, so there's no reason for them to depreciate right now.

 

[keitaro]

I dont get it you only have a comparison of usd to jpy

Shouldnt the graph be showing yen to usd gbp euro and aud

 

To see if its drops and rises were consistent

[Lawrence]

Mudkip - do you have a graph of yen v gbp? would be interesting to see, I think it has been fairly stable but would be interested to know

[Densha]

The English version of the website I use to check the exchange rates:

Yen -> GBP: http://www.forexinvestor.com/currency/showgraph.aspx?valutaid=2064064

Yen -> Euro: http://www.forexinvestor.com/currency/showgraph.aspx?valutaid=2064063

Yen -> USD: http://www.forexinvestor.com/currency/showgraph.aspx?valutaid=2064069

 

Of course I only check Yen -> Euro myself but according to the graphs the exchange rate hasn't been this low since ~April 2010.

[Mudkip Orange]

http://www.google.com/finance?q=GBPJPY will get you yen-per-pound. You can mess around with timescales (I used 10 years) and also click in other currencies.

 

At a 10-year, it looks like so:

 

From 2003-2007 the Pound gains fastest against the Yen. Then everything falls out of the sky in 07-08 before the markets figure out "hey, wait a minute, Pound Sterling can't be *that* cheap" and you have a correction in Q1-Q2 of 2009.

 

If you start the timescale after that correction is over it looks like so:

 

You can pretty clearly see how in the last three years, the Pound, Euro and Dollar have all paced each other while the Yen has gone way up (shown here as Pounds going down relative to the Yen). In that sense then Shinzo's reforms are less about weakening the Yen then they are about restoring it to historical norms.

[DCCLED]

Absolutely, 100% not true. Over the last 10 years the Euro and the Dollar have consistently tracked each other at about $1.30USD=$1.00EUR. The Pound Sterling fell out of the sky during the crisis so that where before 2008 it took $1.95 to buy a pound now it only takes about $1.50. Meanwhile the yen, which had been about 100-110 to the USD before the crisis, just blew up to where last year we were touching 75 yen to the dollar and Carlos Ghosn was threatening to shut down all domestic Nissan production. The only currency the Yen has really stayed "consistent" with is the Aussie Dollar, which is currently trading at 28-year highs.

 

If anything the USD needs to come down a bit, so we can tweak the balance of trade and bring down unemployment more. Meanwhile if Europe hadn't gone all-in on a single currency, you'd see Iceland levels of devaluation in the PIIGS while the Deutschmark appreciated even faster than the Aussie Dollar. But alas...

Here hear everyone, a man who speaks truth. I am a kiwi living in Uk, trust me I know that the UK pound has dropped. The world of model trains is not the same as the Big Mac Index

 

I have been  trading currency for 5 years from my arm chair and this link will bring some knowledge to the bedate.

 

Maybe we need the Japanese Model Train Index as a leading indicator in financial matters after all.

 

http://en.wikipedia.org/wiki/Big_Mac_Index

 

heers

 

Leo

[Ochanomizu]

Perhaps Mr Orange should re-read my last statement carefully.  I was talking about the JPY, not the USD.  I'm quite disinterested in the USD these days.

[E6系]

I think yen will drop to past 100.

 

Ochanomizu,

 

Nice guess ... but I think it got to 99.3 ...

[Ochanomizu]

According to XE.COM it is 99.6.  I think the US$ is still over valued and over rated.

[Mudkip Orange]

Yeah, we're testing the floor. The Yen hit 99.91 a couple weeks ago, then bounced. Monday it hit 99.83, bounced again. 100 is a psychological floor and because of that it's also the breakpoint for a lot of options which makes it a practical floor as well. We might have to do this a few more times.

[E6系]

Yeah, we're testing the floor. ... We might have to do this a few more times.

 

What is your job Mr Orange.  Are you economist?  Very interested to know your experience.

[DCCLED]

"Bouncing off the resistence line"

When I first heard this statement in trading terms many years ago I thought it closely related to my relationship with my then Wife. Testing the resistence line and boucing back off the Support, pretty much an average negoiation in the trading room called the Bedroom.