Japan is Fighting Against the Entire Investing World in the Currency Market (sherwood.news) 50
An anonymous reader shares a report: Japan's Ministry of Finance spent nearly $50 billion on April 29 and May 1 trying to prop up the value of the currency by selling US dollars and buying yen. Who was on the other side of this trade? Data from Deutsche Bank's foreign exchange trading platform suggests: literally everyone. "Nearly all client categories saw record USD/JPY buying during the assumed intervention days," writes George Saravelos, global head of FX research at the German bank, in a note to clients on Thursday.
"That absorption of USD/JPY selling from the Japanese Ministry of Finance was so broad-based continues to point to the lack of effectiveness of this policy." The Japanese yen is the weakest G10 currency in trading on Thursday, deepening its decline relative to the US dollar to nearly 10% so far this year. Very low rates in Japan increase the appeal of holding other currencies where investors can earn more interest. Strategists have warned that action from the Bank of Japan may be needed to reinforce the Ministry of Finance's attempts to guard against further yen weakness.
"That absorption of USD/JPY selling from the Japanese Ministry of Finance was so broad-based continues to point to the lack of effectiveness of this policy." The Japanese yen is the weakest G10 currency in trading on Thursday, deepening its decline relative to the US dollar to nearly 10% so far this year. Very low rates in Japan increase the appeal of holding other currencies where investors can earn more interest. Strategists have warned that action from the Bank of Japan may be needed to reinforce the Ministry of Finance's attempts to guard against further yen weakness.
Business news? (Score:3)
When did Slashdot become CNBC/WSJ?
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Somebody read "prop up ${CURRENCY}" and figured it would be good for some anti-China comments.
Re: Business news? (Score:2)
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Sure, but there are also lots of posters with poor reading comprehension and a bunch more who don't really care what the actual story is about, they just want to post something about China or a couple of old American dudes.
Probably Google's AI has figured out that those types are also lucrative advertising targets.
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This graph has a problem. But first, realize that the last data point seems to be 2010 with a population equivalent to the level of 1970, not 1920. The rest of the graph is a prediction that the population in 2060 will be at the level of 1920. We'll see.
The problem with this graph is that the data is shaded up to 2015, implying the real data extends to 2015 despite the data source being a 2012 study on
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If it works. However, it appears it isn't working.
Visiting Japan right now is the cheapest it's ever been if you're coming from a foreign country, especially the US. Unfortunately, that means everyone is traveling there right now, so tourist destinations like Kyoto are ridiculous right now.
Source: went in October of last year, as well as 5 years previous. Easily 2x more tourists in Kyoto than the last time I was there. Every city bus packed with people.
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Actually I was thinking.."Hey, does this mean a trip to Japan is now cheaper than it used to be?"
I'd love to go over there and try to buy up vintage camera gear at a reasonable price!!
Re: Business news? (Score:4, Informative)
It does mean that, which is why so many people are doing that right now.
I was there in October and there are WAY more tourists than when I have previously been there, due to the currency exchange advantage as well as pent-up demand from ~3 years of no tourism allowed during Covid.
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About how long a flight is that from the US?
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Depends on where you're coming from, and which airport you're landing at.
Here is a selection of non-stop routes from the US to Tokyo-region airports. If you can select, Narita Airport is far more convenient for access to Tokyo-area mass transit as it's closer to the city than Haneda Airport is.
Seattle > Tokyo: 10h
LAX > Tokyo: 11.5h
Dallas / Fort Worth > Tokyo: 13h
Chicago > Tokyo: 13h
Detroit > Tokyo: 13.5
JFK > Tokyo: 14h
ATL > Tokyo: 14h
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Shit, I got the airports backwards. Haneda is the one on Tokyo Bay and has quicker connections. Narita is a larger airport, but built farther away from the city.
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Or it's to set the stage for the upcoming barrage of pro-cryptocurrency articles.
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Ah, multiple benefits. They might want to be careful with that one though. Japan's had general gentle deflation for the last 30 years and it hasn't been great.
So what (Score:3)
This is what central banks are for. They do this all the time. Barely newsworthy.
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This is what central banks are for. They do this all the time. Barely newsworthy.
Yes it's what central banks are for, but if you think they do this all the time you clearly aren't paying close attention. It's incredibly rare for a nation to do what Japan is doing *at the rate Japan is doing it* by any economic metric. Those which do, are often those economies spiralling downhill quickly. Wealthy nations don't do this all the time. This *IS* newsworthy.
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I guess what I really mean is, I don't know what's going on with Japan's economy and don't really care. I suspect economics is largely a pseudoscience anyways. I'm here for the tech news and general commiseration.
Missed the lede (Score:5, Informative)
The actual story is that Japan's central bank raised interest rates for the first time in 17 years [apnews.com], from 0% to 0.1%.
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And this is just the central bank doing its job, from that article: "We made the decision because we foresaw stable and continuous 2% inflation" and that is their target.
It's super annoying when people (not you, the summary) talk as if central banks have freedom to set interest rates to whatever they want or as if these decisions are not directly related to maintenance of the currency. Central banks have two jobs (1) maintain the stable inflation rate, and in doing so (2) don't put unwarranted pressure o
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I've pointed out in the past that inflation occurs not when the government or its central banking subsidiary does this, but when the large influx of currency shows up in consumer markets chasing the same number of goods. To date, the Fed has mostly made sure that this hasn't happened - it's Congress that keeps on making it happen by giving away money via various methodologies like COVID checks and things like student loan forgiveness. The interesting thing is that QE, the (huge) direct purchase of securit
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I see you have an aversion to reality and think you can bend it to your will if you get everyone to 'repeat after me'.
Sadly, that does not work. Reality comes back to bite us. There is no free lunch. If you disagree with the allocation of resources in a capitalist system, you need a different one. But getting people to do productive work in a different system might be a little rough.
The reason we landed on this faux capitalist system is because it provides sufficient impetus for people to go out and wor
Re: U.S. actually the one propping up Japan (Score:2)
Inflation doesn't harm no one, it's the only systematic way for debtors to avoid repaying their debts.
If you can hyper leverage your assets by squeezing your asset base market prices, as happened through the collateralized mortgage market, you can have your cake and eat it completely literally when you can borrow the difference between the inflated price and the residual utility value of the asset after present value accounting adjustment for debt servicing.
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This latest round of inflation has been particularly nasty because the handing out o
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I don't disagree on any of the above. I do note that the QE effect of increasing the money supply will punish us at some time in the future in a way that is not anticipated by the normal discussions of inflation. But as i've said in the past, that is a foreign policy issue more than anything. While we can at least pretend to have hegemony from a global trade perspective, it's irrelevant. That won't last.
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Say what? QE has been the only thing propping up businesses. If the FED didn't step in [cnbc.com] to buy like there's no tomorrow [npr.org] the consumer would be screwed because banks would complain the credit market is frozen. It is now well established that businesses cannot operate unless the Fed steps in to keep things running. If you think otherwise, have Powell
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However, in the current case, the vast majority of inflation is being caused by businesses raising their prices [yahoo.com] just because they can [theguardian.com] to grow their profits.
I read that all the time, like it happens everywhere. But that should only happen in markets where there's not enough competition, right?
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Actually, the US has been trying to fight inflation with a hike in interest rates.
And, being the financial world ruled by gigantic corporations looking for every bit of almost instantly profit, this has led to almost every other currency in the world being devaluated.
Even countries where everything is going smooth are now suffering because huge investors are taking their money away and running to buy US debt.
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Actually, the US has been trying to fight inflation with a hike in interest rates.
Yes, but they have failed.
Even countries where everything is going smooth are now suffering because huge investors are taking their money away and running to buy US debt.
Countries have been selling U.S. debt [usafacts.org].
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I would refute Ken... ...But I have links, and you have nothing.
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And yet the US Treasury bond auction that happened yesterday showed strong demand, and falling yields [cnbc.com].
Seems you don't know what you're talking about. Again.
Sad you don't understand why that is bad (Score:1)
And yet the US Treasury bond auction that happened yesterday showed strong demand, and falling yields.
Typical Slashdot user, so ignorant of the financial market he does not understand that a rising 10 year yield means the government is having trouble finding buyers so they have to boost the yields.
And that "fall" in yields is a tiny drop while the overall rate is near all time highs. It could (and will) go back up again. And talking abut just a single days of sales instead of a long term trend, well that'
Printing dollars will weaken the dollar (Score:2)
Printing more dollars is what you do if you want to weaken the dollar. You increase the supply, so the real value of each dollar is lower. That's the definition of inflation.
You really have no clue what you're talking about.
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The US dollar is too strong [marketwatch.com] right now, and it would benefit trade if it were to slip. A weak dollar would cause oil prices to rise, but investments in U.S. multinationals perform well with a weak dollar, which helps stabilize the economy and improves investment portfolios including the average person with a 401K retirement fund. If the dollar dips low enough, it helps US agriculture and manufacturing sectors. Adding more entry level and low skilled jobs, and allowing lower income families to support themsel
Foreign exchange is most profitable (Score:2)
This is a common event: Hedge funds decide they're going to short Country X's currency. It's the trillion dollars of a hedge fund versus the 100 million of a Central bank's budget: The outcome is always the same. It's the reason the foreign (currency) exchange market is the most profitable and paradoxically, also the most difficult to play.