The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Japan's tragedy kicks up the yen – III | Factoring the tragedy, slowly

Japanese Yen

Image by mollyeh11 via Flickr

The weakness in the Yen is long lasting. In fact while the G7 intervention was only a $500 billion a year long Japanese intervention of closer to $17 trillion also is not really required any more. the weakness in the currency, a direct result of the tragedy and the economic weakness, is now rooted in factotum and the inflows into Japanese equities as recovery takes hold be followed by more shorting of the yen with the trend rather than against the grain, strengthening it to no avail.

The Euro of course has faltered instead with Portugal and more interestingly, Spain’s cajas holding the keys to currency upheavals to come. In the meantime, the yen’s weakness will ensure healthier more consistent flows into Japan and thus the missing period of strong growth may yet be a not too distant dream for the Japanese.

Also as highlighted by Reuters breaking views, the retail giants like Walmart dependent on Asian (Chinese) sourcing for price competitiveness may really be hurt in 2011 with the Chinese building up domestic demand in the new 5 year plan and pushing for higher wages to keep its remaining growth momentum

Enhanced by Zemanta


%d bloggers like this: