JPY devaluation?

Is it just me or GBP-JPY, EUR-JPY and USD-JPY are trying to say that JPY value is just "zero"?

Comments?

iiivb

With a currency that low, we should see more "made in japan" products. But a country so small, expansion and growth is limited. What they need is another WWII to boost their economy.

Industrialization of Japan had been successful under the economic environment of the inflation deeply connected with the structure of a cold war.
As a result of all Japanese companies becoming desperate and especially tacking technical development after the oil crisis in 1973, Japan becomes the country which has the highest industrial technical power in the world, and has exported the outstanding products(including patents) to overseas.
In details, I also wrote that thread.
http://www.forexfactory.com/forexfor...ad.php?t=11251

This picture is TOYOTA's factory in kyushu,Japan.

Check out Nissan's plant(s) in Tennessee, Toyota's and Honda's in Kentucky and Ohio, etc. These plants are US Customs Zones, meaning that anything brought there from outside the US is exempt from tariffs until a finished product destined for sale on the US market actually leaves the plant. Economically, they are Japanese territory.

All the profits from these plants goes back to Japan, and yes, they do create US jobs, but the completed product is basically treated as an import from Japan when it leaves Smyrna, Tennessee, or Louisville, Kentucky.

The point being, a weak Yen increases the value of Japanese exports on the US market, and there are actually products made in the US, inside Customs exclusion zones, that are in effect Japanese exports...

It is in the interest of the Japanese to have a weak Yen, especially during consumer purchasing periods in the US, like the upcoming spring automotive purchase period.

Not that I like this situation, but it is a reality. Understanding it helps me trade Yen better, but that Nissan or Toyota any of y'all Americans out there drive that you think was made in America was basically not. These American Toyota, Honda, and Nissan plants are treated by the US government, economically only, as Japanese turf.

Wouldn't argue with fumafuma regarding industrial production so why the ever falling Yen?

Guess it all comes down to the low interest rate here..so why the low interest rate?

While the cheap Yen is helping exports that keep the factories rumbling there is a serious problem with all things domestic. The massive budget deficit (about 1 1/2 years GDP) eats up about 40% of tax revenue to pay interest on government loans and this creates anxiety in the people about the ability of the government to pay pensions...low as they are already...so the people save higher percentages of ever falling incomes. Consequently we see ever falling retail sales in just about every sector of the economy from convenience stores to new vehicles (negative around 7% y/y)!! ...Difficult to raise interest rates or taxes with deflation and falling sales!!

Guess it's the governments job to sense the anxiety of the people (they don't) and do something about it to create confidence in the people which should develop a greater propensity to spend and revive the domestic economy.

My suggestion would be a large hike in sales tax (paid by all the population) and a large cut in income tax (paid mainly by company employees who can't dodge it). This would result in higher tax revenue and more disposable income in the pockets of employees and should be coupled with a publicity campaign saying that pensions will be guaranteed.

There still seems to be a third world emerging economy mentality by the government here that the local population should live frugally and most of the industrial output should be exported. I think this is very unfair to the hard working Japanese people and economically risky being dependent on the buying power of foreign countries whose economies Japan can't control while allowing the domestic economy, which they should be able to control, to forever decline as it has been doing for the past 20 years or so.

My gut feeling is that it might need another couple of generations to change the feudal mentality of the government (they're very arogant and can't seem to sense the needs of the masses) so it will probably be some time before the mess is sorted out.

OK...the BOJ would love to raise rates but can't justify easily but they hate the carry trade and overseas pressure to strengthen the Yen and for a variety of reasons including summer upper house elections the government doesn't want to raise them....we'll just have to wait and see

Navigator

Hi dukeofdents,

Thank you for your opinion.
Now, the world is under the leadership of the United States.
And the country which excels the U.S. or can oppose by political power,economic strength,and the military strength,or an area do not exist at all.(I submitted application for Diversity Immigrant Visa Program in the U.S...
The present U.S. economy is changing.
The rate of manufacturing industry in GDP is below 20%.On the contrary,a service agency including finance is near 60%.
In this time, Japan is the supply country of a machine indispensable to the whole world, and unless all the countries in the world including the United States receive supply of a machine from Japan, economic activity is unmaintainable.
The structure of international balance of payment of Japan is changing a lot.
The price of a trade surplus is 8 trillion yen. Howerer, for 11 trillion yen, the black figures of the dividend and interest income from overseas have exceeded the trade surplus. The patent income surplus of 1 trillion yen is in others. These bring surplus funds with companies and individuals.
Investment and financing flows into the U.S. exchange market in the form of selling yen for dollars first, and subsequently to the world.
The importance of the Japan-U.S. alliance exists there, we think.

Hi Navigator,

Are you living in Japan? I would like to write reply in Japanese....

It is difficult for foreigners to understand Japanese bureaucratism and Japanese government's financial embarrassment (huge debt servicing expenditures), I think. Thank you for your explanation in details.

We hope there is Japanese politician who says,"A high tax is wrong!".
About 40 years ago,Kounosuke MATSUSHITA said,
"Peace and Happiness through Prosperity"
"A tax is the financial foundation of national management.
However,the heavy tax which disregarded national feelings made tax-payment volition decline, weakened the duty idea to national society,
and resulted in making general morality decline."
Wealth shall run away with Japanese yen from Japan....

Here is in Toyota city.

Well, Fumafuma, all goodwill aside, I am a blue-collar guy who actually worked at the Nissan plant in Smyrna, Tennessee, and what I saw was a Japanese company taking advantage of an American small town and American workers for Japanese gain. I saw them take advantage of American labor laws, American tax laws, get local tax breaks, refuse to pay worker's compensation for injuries on the job, undercut wages, outsource as much as possible to third parties that pay way lower wages, skimp on quality, and send all the money back to Japan.

We Americans and Japanese have a peculiar relationship. We decided in 1945 that we can't fight militarily without one of us being annihilated. In Truman's infinite wisdom, he decided to not completely annihilate Japan. However, we still fight, only economically. There are Japanese who view economics as war, in the feudal tradition. Few Americans view it that way. That's why America will eventually lose...

Our only saving grace in America is that we can go to the local pawn shop and buy an AK-47, while in Japan you have to have a license to own a sword...

Good point Duke. It's getting late and you're working on your second six pack- you gotta love it.

how true it is. i work for DaimlerChrysler and everyday i watch as less and less cars are being sold. less parts are going out across my counter and less work is being performed. we are a country of sublet. if someone else can do it for less lets do it. meanwhile our economy suffers. we dont have pride of workmanship anymore. we dont train our children as japanese do. from when they are young its education becuase they know everyone else will be racing for the jobs. in our country mommy and daddy if your rich pay for everything for you and you will work for them. or if your like me go to a tech school for two years then go to the four year and get your diploma to hope there will be a job for you. just to get fired and 30 years down the road you end up like my father, with large amounts of experience. so they have to pay you more becuase you know what your doing. so they go get someone fresh out of college and pay half as much then fire them on down the road. we are killing ourselves.

and then you learn to successfully trade forex and your troubles are over.

Simply amazing the EUR-JPY, GBP-JPY and USD-JPY crosses lately, specially the first two.

This makes me "feel" like the JPY is devaluating. I am not a pro, but is there any chances that something like the Soro's spec attack against GBP (specially agains danish krone) happens again but now being the JPY the looser?

Please comment...

what that good old saying buy the rumor sell the fact..

If I am not wrong, you sold GBPJPY... you said something about that in other thread I guess...

double check the post mate i said i plan shorting on a break of 235.50

Oh yes... you are right pal...

Since the weak yen is structural
(the Japanese government's debt servicing expenditures are 600 trillion yen),
so I think that it continues.
Althouth I understand neither the euro zone nor the British economy, I will wait for the time to come...

Here is TOYOTA's head factory (start of operations in 1938) in Toyota City.