Soaring Yen

This evening, the Japanese Finance Minister announced giant package to beat the financial tsunami.

Do you think this will curb the strong yen?

The yen has surged and continues its upward trend. This certainly will affect overseas travellers.

Will this continues into 2009?

Any thoughts/views on this?

most analysts are predicting more doom and gloom for much of the world. this means the yen will get stronger as japan will not suffer as much

Japan will not suffer as much? You don't read much of the financial news do you? As a country that HEAVILY relies on exports to the world, many Japanese companies are getting hammered by the strong yen. Whether we're talking about the car makers or smaller manufacturers, people around the world are unfortunately purchasing fewer Japanese products because it is indeed more expensive than it was six months ago...

As for the plan put forth by the Japanese government, as is the case with most other government intervention within the economy, I don't think we'll know if it works or not. Of course, there will probably be a rally in the financial markets but I'm sure those will be more than offset with more decreases in the economy. I'm looking at this problem as one that will take at least a couple years to fully correct itself again. Of course in a perfect world, being an overseas traveler, I'd love for the yen to bounce back up to the $1 USD = 120 yen region but I know those days won't be coming back for a looooong while.

pete, you need to read more about what is actually happening in Japan at the moment. The high yen is actually causing Japan to suffer a lot- exports have plummeted and thousands of people have already been laid off with a lot more to come in the New Year.

Many small manufacturers are facing imminent bankruptcy and even large companies like Sanyo and Sony are struggling. Retails sales inside Japan are also well down.

I personally have just been laid off from one of my part time jobs as the manufacturer who employed me could not afford to keep their part time employees on. The phones are not ringing, their sales are less than half what they were this time last year.

i didn't say japan is not suffering, but so far it is not suffering as much as as the US and Europe.

have you seen the size of their writedowns and job losses..? obviously not.

first the U.S. and Europe suffers. Then, because they suffer, they can't buy Japanese products anymore, so Japan suffers. It's only been a few days since the big-time enterprizes laid off thousands of employees. Sooner or later they will have no place to live, but that's going to be tomorrow or the day after. However, several weeks ago, when the economy here in Japan collapsed for the first time in years, there were days when many trains a day would stop due to suicidal accidents.

Back to the topic of "overseas travellers," tonight again, there was news on ski resort damage. And you may think that this is a chance for those in Japan to travel abroad, but since they don't have the yen to pay for the tour fee, the travel industry is going down.

But let's look at the bright side, shall we? Good energy brings good fortune.

Back to the topic of "overseas travellers," tonight again, there was news on ski resort damage. And you may think that this is a chance for those in Japan to travel abroad, but since they don't have the yen to pay for the tour fee, the travel industry is going down.
Not only is the Yen strong but the AUD is weak as.... from 108Y to the AUD in Feb to 58Y at the moment: so if the travel industry is going down with the reduction in both oversees and local tourism are hotels etc likely to reduce rates? Australia also relies on exports so efforts to improve the AUD are unlikely, and there is a concerted effort here to encourage Aussies to holiday at home. Qantas no longer discounts fares to Tokyo as Jetstar has started into Narita as well as Osaka, but from all reports Jetstar are disappointed with the response......wonder why...

I do watch international news, pete, and it's my conclusion that Japan is suffering just as much as many other countries- large industries are looking very unstable and future employment for many people is looking very grim. Iceland is probably in more trouble, but the situation here is comparable with the US and many countries in Europe.

The soaring yen is bad news for Japan in general, not good news- in the past the Japanese government has intervened to drastically devalue the yen when it has reached this kind of level against the USD. It looks like this time the USD may not stop its freefall any time soon though, which will further cripple industry here.

I would say unemployment will soar next year as new graduates do not get hired and further layoffs are necessary- I don't think we've even seen half of it yet. The retail sector is starting to suffer as well and next year will be very hard for them if consumer spending doesn't pick up soon, which it most likely won't.

By comparison I would say my own country, New Zealand, isn't doing so badly so far. Interest rates have come down (in Japan they can't possibly go lower, they have been cut as far as possible already), taking the pressure off many people with their mortgage repayments and the weak NZD is good for exports, which NZ is heavily reliant on. We haven't yet seen the mass layoffs that Japan is starting to have.

write downs in the US: 1 trillion dollars. write downs in japan: a mere 50 billion.

job losses in japan: non permanent staff including Sira. Job losses in the US: 500 000 in November.

General Motors about to go bankrupt.
Toyoto to report a mere 1 billion dollar loss.

New Zealand? That's less than the population of Yokohama...who care? if NZ couldn"t claim Australian dole - then NZ would have a problem

To start with, it's not only non-permanent staff here losing their jobs.

In any case, since the tone of the discussion took a downturn with your last post, I'll leave it at that. We're going to have to agree to disagree about who is suffering more and whether a small population means that the people there don't matter.

We're all still doing better than most people in Iraq and Pakistan so probably shouldn't be complaining anyway.

if you work for a small companny that goes bankrupt, you suffer just as much as the people who work for a big company that goes bankrupt.

But the discussion was based on the effect on the country of the economic crisis. In totally, the figures show that Japan is not suffering as much as the US and Europe.

The original poster asked about the yen. I continue to believe that the yen will only get stronger.

My point is that NZ accounts for a tiny fraction of the world population and most of NZs immunity is based on it's association with Australia which will also fare much better than most.

I agree that Iraq must be a horrid place to be living. I'm not sure that Pakistan is such a terrible place to be.

As for suffering, I would like to add that there was an earthquake in China recently that has left more than the combined populations of Australia and New Zealand homeless.

They are probably not aware of the current financial crisis.

In response to Fmj's latest post, I'm not sure about hotels but a lot of prices are going down mainly to encourage local consumption. Gasoline is the most typical example, and outbound tours from Japan is getting cheaper, too.

The theme of "yen and Ausie" is featured every weekend on Japanese news digest shows, and tonight they were saying that manshon (condominiums) designed for Australian expats in Japan are probably going to get cheaper. Btw, the yen is not affecting only consumers from Western countries but from places like Korea as well which was becoming a huge market.

OK so if the Yen ain't dropping then someone put a rocket up the AUD..anything to help this little old tourist..sigh....

there was an earthquake in China recently that has left more than the combined populations of Australia and New Zealand homeless.

I knew there were a lot of people who became homeless but I wasn't aware it was in the millions. But just to be accurate it was about 5 million people, not 25 million.

yes, 5 million according to the official chinese figures but they have a habit of looking on the bright side. check some non-government estimates...

With the Toyota announcement of a trading loss for the first time, and general downturn in Japan now, is the Japanese govt now likely to exert downward pressure on the yen? Would this help with its export driven economy?

1 Euro has been lower than 120 Yen during last and most of this month. However, 1 Euro exceeds 125 Yen again.

Maybe Yen stabilizes on its over-valued level for some time, maybe it will get back to 150 Yen per 1 Euro during the first half of next year. Nobody knows the future.

The Yen certainly won't get stronger, because a too strong Yen would hurt Japan's economy and therefore cease to be the "save haven" it has been considered to be.

Last I heard the Yen was very artificially over-valued as a result of investors dropping the US$ and buying Yen. The Yen is heading for a decline. Could be weeks or months, I don't know but it is supposedly going to drop down a fair bit.

The Yen is heading for a decline. Could be weeks or months, I don't know but it is supposedly going to drop down a fair bit.
Now, very selfishly, that's a Xmas present I am VERY happy about!!!!

Just to clear things up -Kiwis just cant claim the Aussie dole - the last government put a stop to that - they have to be here 2 years before being entitled to any centrelink support. But it would be nice for the Yen to drop and the Aussie dollar to rise again - preferably before March. Last May we got 95yen to the AUD on last famliy holiday and now we are pushing the 60yen mark. Fingers crossed - all goes well from here. But remember - if you are able to take overseas holidays in this financial climate then think yourself a lucky one - lot of people I know can!