Japan: incompatible trends

Article Abstract:

The Japanese bond market is booming yet the currency is weakening and these two processes tend not to occur together. Nomura argues that Japanese economic prospects are not good and investors are moving into foreign currency assets since Japanese interest rates are low. Japanese interest rates and the currency may have ceased to become important for the real economy. Other analysts argue that the economy is recovering and the bond market could be in danger of collapsing with investors moving from bonds into equities.

Government Bonds, Capital market, Capital markets

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Japanese yen: falling

Article Abstract:

Nat West Markets sees the Japanese yen as likely to fall to 120 yen per US dollar during 1996. The Japanese currency supply looks set to increase with low interest rates and bond buying by the Bank of Japan. The Japanese trade surplus has been eroded by the high value of the yen. Imports could rise as domestic demand increases in 1996. Japanese investment abroad could also weaken the yen. The timing is the issue rather than whether the yen will fall, due to the factors indicating that a fall is likely.

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Japan: a yen for trouble

Article Abstract:

The Japanese yen has dropped in relation to the US dollar since April 1996, and this is due to a number of factors including low interest rates in Japan. The yen has risen in value since Jan 1996, and explanations given include a lesser difference between Japanese and US interest rates and increased concern over whether the US dollar will continue its rally. The Japanese authorities, meanwhile, and concerned to ensure that the yen does not rise.

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