221811 Resource 119247 120646 120646 1230300996764 1230301276724 Controlled Japanese May Not Interfere in Currency Market After All

Political pressure likely to prevent Japanese yen depreciation

<font size="2"><span style="font-family: verdana,arial,helvetica,sans-serif;">For a few weeks now, the Japanese have been fretting about how quickly the yen has been rising in<span style="font-weight: bold;"> forex trading</span> on the currency market. The yen has been appreciating against every other major currency as risk appetite declines and the <span style="font-weight: bold;">carry trade</span> unwinds.</span><br style="font-family: verdana,arial,helvetica,sans-serif;" /><br style="font-family: verdana,arial,helvetica,sans-serif;" /><span style="font-family: verdana,arial,helvetica,sans-serif;">Indeed, current conditions make it desirable for the <a title="Japanese intervention currency market, currency market, forex trading, yen forex trading, forex trading currency market, forex conversion losses, exports, economy" target="_blank" href="item/221008">Japanese government to intervene</a> in the <span style="font-weight: bold;">currency market</span> and contribute to a depreciating yen:</span><br style="font-family: verdana,arial,helvetica,sans-serif;" /></font><ol style="font-family: verdana,arial,helvetica,sans-serif;"><li><font size="2">Japan's <span style="font-weight: bold;">economy</span> is slowing.</font></li><li><font size="2">Japan has entered its first monthly trade deficit in nearly 20 years.<br /></font></li><li><font size="2">Japanese exports are more expensive -- making them less desirable.</font></li><li><font size="2">Corporate profits are shrinking due to <span style="font-weight: bold;">forex conversion losses</span>.</font></li></ol><font size="2"><span style="font-family: verdana,arial,helvetica,sans-serif;">Forex Blog points out, however, that <a title="Japanese intervention currency market, currency market, forex trading, yen forex trading, forex trading currency market, forex conversion losses, exports, economy" target="_blank" href="http://www.forexblog.org/2008/12/japan-intervention-unlikely.html">Japan is likely to stay out of it for political reasons</a>.</span><br style="font-family: verdana,arial,helvetica,sans-serif;" /><br style="font-family: verdana,arial,helvetica,sans-serif;" /><span style="font-weight: bold; font-family: verdana,arial,helvetica,sans-serif;">The U.S. is likely to frown on Japanese intervention in the currency market</span><br style="font-family: verdana,arial,helvetica,sans-serif;" /><br style="font-family: verdana,arial,helvetica,sans-serif;" /><span style="font-family: verdana,arial,helvetica,sans-serif;">In all likelihood, the U.S. would like to see the <span style="font-weight: bold;">Japanese yen</span> continue to appreciate. It makes exports more expensive from Japan, and could help the U.S. become more desirable as a trading partner -- especially in terms of auto exports.</span><br style="font-family: verdana,arial,helvetica,sans-serif;" /><br style="font-family: verdana,arial,helvetica,sans-serif;" /><span style="font-family: verdana,arial,helvetica,sans-serif;">With political pressure from Europe and the U.S. for Japan to let the currency issues with the <span style="font-weight: bold;">economy</span> and the currency market work themselves out, it is likely (but by no means certain) that the Japanese government will eschew intervention in the <span style="font-weight: bold;">currency market</span> -- for now at least.</span></font><br /> 9 application/xml false carry trade currency market economy exports forex conversion losses forex trading forex trading currency market Japanese intervention currency market yen forex trading Forex trading on the currency market http://www.gftforex.com/land/index.asp?aid=446 <script type='text/javascript'>reddit_url='http://forex.gftforex.com/public/item/221811'</script> <script type='text/javascript'>reddit_title='Japanese May Not Interfere in Currency Market After All'</script> <script type="text/javascript" src="http://www.reddit.com/button.js?t=2"></script> <script type="text/javascript"> digg_url = 'http://digg.com/business_finance/Japanese_May_Not_Interfere_in_Currency_Market_After_All'; </script> <script src="http://digg.com/tools/diggthis.js" type="text/javascript"></script> <script type="text/javascript" src="http://tools.tipd.com/evbs.js"></script> <script type="text/javascript"> evb_url = 'http://forex.gftforex.com/public/item/221811'; evb_big(evb_url); </script> Mozilla/5.0 (Macintosh; U; Intel Mac OS X 10.5; en-US; rv:1.9.0.5) Gecko/2008120121 Firefox/3.0.5 127.0.0.1 127.0.0.1 mmarquit 66.182.66.2 false true false false true 119247 blog blogsite/GFTForex/web