Japan and Currency Market: Update September 7, 2024.

 

Japan vows to respond appropriately to disorderly yen moves

Article Source:  https://mainichi.jp/english/articles/20240507/p2g/00m/0bu/017000c

Ideas:

One might consider speculation normal business activity these days while others might consider it not a good way to do business. Unfortunately, there are a lot of not good types out there who want to bend the rules related to currency exchanges.

These days, its seems like economic fundamentals are either ignored and or the real-world of economics has moved past the traditional economic thinking.

Yes, foreign exchange rates need and should be stable, but there are too many players out there who want to upset the system for their own gain, and it just possible, someone or some group is manipulating the Japanese currency exchange for their benefit.

Japanese officials are going to remain silent for several reasons. One reason is they don't want to look or act like they are being currency manipulators, which while maybe not 100 percent illegal is definitely against the rules of the currency exchange game.

The other reason they wan to remain silent is to not upset the financial markets or cause harm to the financial markets, as anything they do might cause a panic in the market.

So they are not going to say anything they are watching the foreign exchange markets very carefully, and will continue to monitor them as needed.

It looks like what is happening has nothing really to  do with the Bank of Japan or even currency exchanges in Japan, as it seems like its global and not Japan related to the surges in the Japanese yen situation

So in this situation, it seems, the Bank of Japan has no real control over the Japanese yen situation, as it all happening globally, and it might even be coordinated with some financial groups inside Japan.

Without actual manipulating the Japanese currency exchange situation, there doesn't seem to much the Bank of Japan can do as maybe the reason why the Japanese yen has been very weak for a very long time.

Maybe in 20022, the Bank of Japan felt it had no choice but to intervene in the currency exchange market, as it was getting out of control at the time.

Again, the Bank of Japan wants to be as quiet as possible, as not to upset the markets and also they don't want to telegraph anything they are going to do which might give the global players more leverage in doing what they are now involved in.

Its all very cloak and dagger and the BOJ has to work behind the scenes to try and out-smart the global financial currency exchange traders who are trying to manipulate many currencies.

The interest rate gap, is large at about 5 points, as the Japanese key rate is around zero, while the US rate is around 5 or a little higher, which can cause havoc related to the Japanese yen, and of course import prices in Japan.

The key rate gap is not the only reason for the weak Japanese yen, as currency exchange traders play a large part in the process, and the Bank of Japan, again, doesn't seem to have much control related to the weak Japanese yen, as they can't control what global currency exchange traders do as they can only react or try to prevent an actions, without much success recently.

Have a nice day!