Japanese ¥en

[JEast]

I assume many have been scratching their heads as to why the US 30-year bond has been rallying this year.  At the risk of pontification, maybe the Asian central banks are just reading the tealeaves in the currency markets and specifically the Japanese ¥en.  As the ¥en approaches 110 against the USD, the other Asian economies will nearly be forced to depreciated too.  If/When this happens, I suspect the best place to park capital as a central banker or Asian corporate CFO is in US Treasuries while the drama plays out.  If this comes to pass, the secondary effect is that the US will be importing non-inflationary 'stuff.'  Stay tuned.

 

Cheers

JEast

[gary17]

JEast: What do you mean by non-inflation stuff?  Can you give some examples? 

 

Thanks

Gary

[JEast]

non-inflationary stuff?  --  Like importing less expensive things people buy at Wal-Mart plus chemicals, cars (Hyundai/Nissan) compared in USD today.

[Zorrofan]

More and more I feel this ends badly for Japan....why would I hold a low-yield Japanese long bond in depreciating yen while the government tries to restart inflation, further reducing the already low return in real terms??

 

cheers

Zorro

[randomep]

 

I am not an economist and I don't assume anything. How do we know that Yen is going to 110 to the dollar? As I understand, to get there requires lots of inflation, and that is very very hard to come by in Japan. I don't think they are meeting the 2% target.