In the past few weeks global markets have focused on the weakening yen, as politicians and business leaders, particularly in Europe have called for a halt in Japan’s “weak currency” policy. Tokyo’s efforts to stimulate it’s export sector have become front and center topic in the financial media, as global businesses become increasingly concerned about the currency war. In fact the number of FT articles containing the word “yen” hit a record recently.
Similarly, Google search frequency for “JPY” rose recently as well.
Public’s attention has therefore turned to the G20 meeting this week, where some have hoped Japan would be asked to moderate its policy. The Eurozone is particularly concerned that the relative strength of the euro will delay its exit from the economic malaise. Germany for example is in direct competition with Japan in auto sales, and a relatively small change in the EUR/JPY levels could result in major differences in sales and profit margins.
But with the world watching and the Germans hoping for action against Japan, the US quickly stepped in to support Japan’s policy.
Sober Look is a no-hype financial markets/macro blog that typically relies on data analysis, primary sources, and original materials. We keep it concise, to the point, with no self-promoting nonsense, and no long-winded opinions. If you are looking for Armageddon predictions or conspiracy theories, you will be thoroughly disappointed. Topics include financial markets, global economy, asset management, risk management, derivatives, regulation, and policy, particularly as it pertains to capital markets.
Questions, suggestions, comments, guest posts, etc. are always appreciated. Rude or inappropriate comments that add little value to the discussion will be removed.
With the world watching, Bernanke gives a go-ahead to the currency war
Sober Look
http://soberlook.com/2013/02/with-world-watching-bernanke-gives-go.html
In the past few weeks global markets have focused on the weakening yen, as politicians and business leaders, particularly in Europe have called for a halt in Japan’s “weak currency” policy. Tokyo’s efforts to stimulate it’s export sector have become front and center topic in the financial media, as global businesses become increasingly concerned about the currency war. In fact the number of FT articles containing the word “yen” hit a record recently.
Similarly, Google search frequency for “JPY” rose recently as well.
Public’s attention has therefore turned to the G20 meeting this week, where some have hoped Japan would be asked to moderate its policy. The Eurozone is particularly concerned that the relative strength of the euro will delay its exit from the economic malaise. Germany for example is in direct competition with Japan in auto sales, and a relatively small change in the EUR/JPY levels could result in major differences in sales and profit margins.
But with the world watching and the Germans hoping for action against Japan, the US quickly stepped in to support Japan’s policy.
Sober Look
http://soberlook.com/
Sober Look is a no-hype financial markets/macro blog that typically relies on data analysis, primary sources, and original materials. We keep it concise, to the point, with no self-promoting nonsense, and no long-winded opinions. If you are looking for Armageddon predictions or conspiracy theories, you will be thoroughly disappointed. Topics include financial markets, global economy, asset management, risk management, derivatives, regulation, and policy, particularly as it pertains to capital markets.
Questions, suggestions, comments, guest posts, etc. are always appreciated. Rude or inappropriate comments that add little value to the discussion will be removed.