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China-Japan-Koreas
Japanese yen hits 27-month low against US dollar
2012-12-27
Excellent move by Abe. We are now at the Keynesian (PBUH) end game. Only problem is that it won't cause inflation, deflation will carry on its merry way. As Korea sees its export being threatened by the weaker Yen, it too will weaken its currency. As will China then India and the S.E. Asian Tigers. Then onto to Europe and then to...
This will make the Fiscal Cliff look like a blip on the road. Think Coyote Fall.

The Japanese yen has dipped to a 27-month low against the US dollar amid speculation that policymakers will take steps to weaken the currency.

It was trading close to 85.84 yen against the US dollar in early Asian trade, the lowest since September 2010.

Japan's new Prime Minister Shinzo Abe has promised steps to weaken the yen to help revive Japan's sluggish economy.

He has even suggested that Japan's central bank should print "unlimited yen" to help stoke inflation.
Posted by:tipper

#4  The graphic at the article shows that the Yen now buys less of a US dollar than it used to, i.e. it takes more Yen to buy one dollar.

Translated into policy terms, this is an attempt to prop up Japanese exports to the US (dollar buys more goods), to compete against US industry (dollar-denominated goods are more expensive) and to try to get the Japanese economy moving again.
Posted by: lotp   2012-12-27 16:18  

#3  That doesn't look like panic to me, tipper - that looks like common sense.

"He has even suggested that Japan's central bank should print "unlimited yen" to help stoke inflation."

Mr. Abe must be the love child of Bernanke and Geithner. :-(
Posted by: Barbara   2012-12-27 13:08  

#2  Update
Looks like panic is setting in.
Japan Will Limit Debt Financing, New Minister Asserts
Posted by: tipper   2012-12-27 11:08  

#1  I'm confused. When they say that the Yen dropped are they saying that $1.00 buys fewer yen than it did? Or is a "weaker" yen one where $1.00 buys MORE yen than it did?

I thought that the stronger the currency the MORE of a different currency it bought which would mean that the lower the yen number the stornger the yen but this sounds backwards. Of course the lack of labeling on the graph and the lack of definition on the pronouns doesn't help.
Posted by: AlanC   2012-12-27 08:34  

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