Japan: Mr Dollar speaks

Article Abstract:

Japan's Ministry of Finance's international finance bureau's director general, Eisuki Sakakibara, appears to have stated that the Japanese yen has dropped enough in relation to the US dollar. The low value of the yen and low interest rates have helped increase demand and aided in the recapitalization of the Japanese banking industry. The US also has to agree to a shift in the dollar/yen relationship and it is likely that authorities in both countries agree that the dollar has risen enough. Sakakibara's statement has led to instability in bond markets, though short-term interest rates may not be raised for some time.

Foreign Currency Management, Capital market, Capital markets, Foreign exchange

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Dollar doubts unsettle investors

Article Abstract:

The US dollar has dropped in value and this could lead to problems for European exporters having to compete with US companies. The US dollar could fall further if Japanese interest rates are raised, which may occur due to Japanese economic recovery. The US trade deficit could increase due to rises in import costs and the impact of previous rises in imports and drops in exports. Some investors have borrowed using yen to reinvest elsewhere, but this could change, pushing up the value of the yen.

Administration of General Economic Programs, Foreign Exchange & Reserves Policy, Prices and rates, Dollar (United States), Foreign exchange market

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Japan: unwinding

Article Abstract:

The Japanese yen is weakening and this trend is likely to be encouraged by measures undertaken by Japan to promote capital outflows. Foreign exchange intervention has been geared to boosting the value of the US dollar in relation to the yen, and a trade dispute between the US and Japan over automotive products appears to have been solved. Japan is loosening its monetary policy and may also introduce fiscal measures to help boost consumption.

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