Cheaper Yen Makes Koreans Angry

By www.ForexConspiracyReport.com

Cheaper Yen Makes Koreans

Angry

http://www.forexconspiracyreport.com/

http://www.forexconspiracyreport.com/cheaper-yen-makes-koreans-angry/

Japan is trying to reverse two and a

half decades of deflation buy

devaluing the Yen.



Not everyone is happy about this,

including the South Koreans.



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The Taipei Times reports as South

Korea warns Japan.


http://www.taipeitimes.com/News/biz/archives/2015/05/05/2003617493


South Korea’s top currency official

fired a warning to Japan: His nation

has stepped up scrutiny of the yen’s

tumble against the won after damage

to exporter earnings.



“Korean companies face bigger

difficulties this year than last,” said

Song In-chang, director-general of the

Ministry of Finance’s International

Finance Bureau.



“What’s different is that we have been

paying attention to the won-yen rate

since last year, whereas the won-

dollar was our main focus before that.”



The currency’s gains against the euro

have also caught Song’s attention, he

said in an interview at Sejong, south

of Seoul, on Thursday last week.



The won is at its strongest level

against the yen and the euro since at

least 2008, putting pressure on

exports that have fallen for four

straight months this year, the longest

streak since 2009.



A healthy economy tends to drive up

the value of a nation’s currency.



That is what is happening to Japan

and they are losing out in the export

game as Japan seeks to devalue its

currency in an effort to jump start their

economy.



Traders Should Pay Attention



The actions of the Japanese

government should be of interest to

currency traders as well as the South

Korean central bank.



Bloomberg Business warns that Yen

bears are in danger of being caught

in a reversal.


http://www.bloomberg.com/news/articles/2015-05-03/dollar-advances-as-yen-bears-retreat-before-u-s-payrolls-data


Speculators unwinding bets against

the yen risk adding to the litany of

wrong calls that has bedeviled foreign-

exchange traders this year.



The dollar traded near a three-week

high versus the yen even as bullish

bets for greenback were cut to levels

last seen before Japanese Prime

Minister Shinzo Abe took office in

2012 promising reflationary policies.



The U.S. currency is little changed

against the Japanese counterpart this

year even as the Federal Reserve

discusses raising interest rates and

the Bank of Japan continues to carry

out unprecedented easing.



“With risks that U.S. markets are

forced to re-price for a first Fed move

no later than September and possibly

June or July, then dollar-yen below

120 yen looks like a steal,” said Ray

Attrill, global co-head of currency

strategy at National Australia Bank

Ltd. in Sydney.



Traders are at risk of getting ahead of

themselves, especially in anticipating

that the Fed will bump up interest

rates.



The Japanese want a cheaper Yen but

may be forced to acquiesce to trading

partners and allies like the Koreans as

the cheaper Yen makes Koreans

angry and apprehensive.



Background on a Cheap Yen



Seeking Alpha addresses why the

Yen is weak.


http://seekingalpha.com/article/3131536-why-the-japanese-yen-is-weak


While the BOJ didn’t adjust rates at its

previous meeting, it clearly notices

that its economy is languishing.



Inflation measures, exports, and wage

growth all remain weak, which is

weighing on economic activity as a

whole.



If the current trend continues,

policymakers will be forced to act

again in the future, further easing

policy and weakening the yen.



With this expectation, Japan’s

currency will likely remain weak

against its major trading peers in

coming months.



The Yen is weak because Japan

wants to increase exports and the Yen

is weak because Japan is still fighting

a weak economy.



Whether the Koreans or anyone else

is upset about all of this, the Yen will

probably remain weak for some time

to come.


News & Politics

Cheaper Yen Makes Koreans Angry