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The story
The yen fell in New York foreign exchange trading on the 19th, closing at 158.45-55 to the dollar, down 50 sen from the previous Friday’s close. After last week’s US CPI and PPI data showed accelerating inflation, US long-term interest rates climbed to 5.14%, driving yen-selling and dollar-buying as markets focused on the widening Japan-US rate gap. Rising oil prices were also viewed as a headwind for Japan’s economy through higher energy costs, further pressuring the yen. On 5channel threads, opinions clashed between those who see the weak yen as a tailwind for exporters like the auto industry, and those who argue it merely reflects accelerating capital flight into overseas investment; the discussion also touched on comparisons of Japan’s and South Korea’s government debt levels and past currency-intervention lines.
[NQN New York = Mina Inaba] The yen fell in New York foreign exchange trading on the 19th, closing at 158.45-55 to the dollar, 50 sen stronger than the previous Friday’s close against the dollar. Strong US inflation worries and a same-day rise in US long-term interest rates weighed on the yen. Rising US crude oil prices also encouraged yen selling.
Last week’s US consumer price index (CPI) and producer price index (PPI) data for September showed that price increases are accelerating. Markets increasingly expect the Federal Reserve (Fed) to hold rates steady at its Federal Open Market Committee (FOMC) meeting on the 27th-28th, then raise rates at the December meeting.
Amid inflation concerns and expectations of higher rates ahead, US long-term interest rates closed at 5.14% in bond trading on the 19th, up 0.07 percentage point from the previous Friday, spurring yen selling and dollar buying as markets focused on the widening Japan-US rate gap. In US crude oil futures trading, the front-month WTI (West Texas Intermediate) contract closed at $103.66 a barrel, up 2% from the previous Friday. The view that higher energy costs would hurt Japan’s economy also weighed on the yen.
Source: nikkei.com / Original article here
What people said
Seriously, the sash manufacturing industry is invincible
How would it even get hit by this?
No joke, there's a boom in demand for swapping aluminum window sashes for resin ones under energy-saving rules — it's a windfall, a total windfall
This lying Nikkei index is finished
So what if there's a cyberattack?
Does that even affect anything?
No, it's a setup where you can't turn a profit unless you sell yen
Right now selling yen is literally the only way to make any money
Why's that??? Whose fault is it???
Well, it's Kuroda's fault
While the whole world was hiking rates, he kept negative rates all by himself
and we got grilled for it (yakitori — skewered and cooked, i.e. Japan got burned)
It did claw back to 155 once, though
It's a tailwind for the auto industry, a core pillar, so it strengthens Japan's economy
Everyone but Toyota is struggling, and overseas local production is now the norm — no benefit flows back home
A weak yen might be in the national interest, but
obviously it's a losing bet to just sit on yen, so the sharper people keep piling into overseas investment
and now it's full of people who profit more when foreign economies grow than when Japan's does
Because there's no workforce left
Wages are low here, and plenty of other countries actually have people
157-158 is the sweet spot for a happily weak yen
Pretty sure economic benefit has nothing to do with whether the media makes noise lol
Staying in that range works out just right for stock prices too
The pace of rate hikes is what'll make the real difference
Japan vs. Korea gross government debt (% of GDP)
Japan: 200%
Korea: 50%
Net debt-to-GDP of 136% is the worst in the world, Korea's is 9.3%
Even a grade-schooler could see Japan's on the edge of a cliff
Yet the won isn't exactly strong either, is it
Household debt-to-GDP ratio
Korea: 88.6%
Japan: 61.1%
Even the AI tools companies are rolling out are foreign-made, so of course this won't stop
Japanese people invest overseas plenty too
and if Japanese stocks rally, foreign investors will just cash out their gains and leave.
Whether it's French government bonds or the old 'Mrs. Watanabe' retail-FX crowd,
things get messy whenever Japanese investors swing to extremes lol
What makes it worse is the Japanese themselves don't even realize they're doing it.
Seems like it wasn't a bureaucrat-written script, just an off-the-cuff remark
She scrambled to put out the fire that afternoon, making excuses on X too
This person is genuinely dangerous
She keeps hinting at more government bonds, and still says a weak yen has both good and bad sides.
In the current situation, a weak yen is bad, full stop.
I stayed up all night putting this together for you guys, here it is. [Permanent archive edition]
■Chart 1: government bond yields
https://i.ibb.co/C52h1Vfn/img.png
■Chart 2: currency strength
https://i.ibb.co/R4D2wj57/img.png
The Takaichi administration's just living it up lol
It might be bad if you center ordinary citizens, but
whether the yen or rates go down or up,
there's always some company that profits either way.
It's complicated, isn't it.
then slam foreigners for 'buying up Japan' when they invest here instead
nothing but inward-looking people like this
LOL
Guess they've got no money, no brains, no status — nothing lol
Getting out of Japan, economically speaking, is a must
Beyond the bare minimum you need to live on, you should hold it all in foreign-currency assets
Looking at the real effective exchange rate, the yen is still overvalued — it's not too late to start now
The IMF has had tax-hike-happy Finance Ministry bureaucrats on secondment there, so who knows how reliable that is lol
Though apparently Finance Minister Katayama is being sent there next.
Even though Japan's public safety record is arguably still #1 among major economies right now?
Becoming a safe haven takes stable public safety, sure, but it also requires economic stagnation — so in a state like Japan's now, with economic activity picking back up, it won't function as a safe haven
The super-strong yen during the DPJ government era happened simply because the DPJ ran austerity fiscal policy during the double punch of deflation and the Lehman Shock, stalling the economy
The exchange rate's just too unstable
Can't trust the yen at all these days
should ideally be stable
If it's swinging around this wildly,
the euro, steady in the 1.0-1.25 range, is the better pick
Basically it just means few people around the world see this as a crisis yet.
The world swings up and down with Japan at the center of it,
so in that sense, Japan actually is stable.
Background and key points of this discussion
A weaker yen against a stronger dollar is often explained by the ‘interest rate differential trade’: the wider the gap between Japanese and US interest rates, the more capital flows toward higher-yielding dollar assets. As the thread notes, Japan’s government debt is considered among the highest of any major economy as a share of GDP, and concerns over fiscal sustainability are sometimes cited as one factor undermining confidence in the yen. On the other hand, whether a weak yen truly benefits exporters like automakers is hard to generalize — it varies company by company depending on how much production has moved overseas and how supply chains are structured, so the notion that ‘a weak yen equals a blanket national benefit’ is a frequent point of real-world debate. There’s also a history of the yen being bought as a ‘safe haven’ during financial crises, though some argue that function tends to weaken when domestic economic activity is robust — and the disagreements in the thread reflect these underlying structural issues.
※This article is excerpted and summarized from the 5channel (Breaking News+) thread ‘[Forex] NY Dollar-Yen Falls to 158.45-55 as US Rate Rise and Oil Prices Spur Yen Selling‘.
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