Kishida disaster: Yen from 110 to 147 to the Dollar in 1 year

Kishida disaster: Yen from 110 to 147 to the Dollar in 1 year

Kanako Mita, Sawako Utsumi, and Lee Jay Walker

Modern Tokyo Times

Prime Minister Fumio Kishida of Japan took office in early October last year. The Yen was 110 to the Dollar when Kishida took power. However, today it is a staggering 147 Yen to the Dollar.

His “do nothing approach” and empty “new capitalism” – while seeking to double military spending despite the horrendous debt mountain – sums up his administration. Since Japan will likely buy more military arms from America – at the current currency level, it means Japan will be paying 33 percent more. No wonder America adores the “aircraft carrier – aka Japan” to contain China.

Finance Minister Shunichi Suzuki said, “We cannot tolerate excessive volatility in the currency market driven by speculative moves. We’re watching currency moves with a strong sense of urgency.”

However, with Japan continuing to print money like “no tomorrow,” the Bank of Japan is tied by the horrendous debt mountain. Thus, the Bank of Japan knows that increasing the interest rate substantially – from its usual moribund self – will entail high debt repayments.

Reuters reports, “Japan intervened in the currency market last month to arrest sharp yen falls, driven largely by the policy divergence between aggressive U.S. interest rate hikes and the Bank of Japan’s resolve to keep monetary policy ultra-loose.”

However, the Yen to Dollar rate is higher now. Thus, even if the Yen comes down briefly against the Dollar concerning a similar intervention, it is likely to do little in the short term until fundamentals dictate differently in America.

More woeful news, relating to wholesale prices rising by 9.7 percent from 12 months earlier, was also announced. Kyodo News reports, “The corporate goods price index reached 116.3 in September, its highest level since comparable data became available in 1960.”

Endless trade deficits under Kishida, the decline of the Yen to the Dollar, the high corporate goods price index, and other woes, are systematic of Kishida’s administration.

Japan followed America’s lead in putting sanctions on the Russian Federation. Yet, other major powers in Asia – including China and India – took a more neutral stance. Thus the dismal economic woes concerning Kishida’s anti-Russian Federation policies are impacting heavily on people in Japan.

Hence with three squandered economic decades (mainly) under the ruling Liberal Democratic Party, Kishida’s first 12 months in power is directionless – and woeful to an extreme.

Jesper Koll (Monex Group – director of financial services) told CNBC, “… yen could weaken further toward the 155 level, strengthening only next spring — and that wouldn’t be the result of action from Japan, but of the Fed signaling that it has “stepped enough on the brake.”

The above quote by Koll highlights the decline of Japan. Once, Japan was an innovative economic powerhouse in the 1980s. However, this nation is now blighted by one of the highest ratios of debt in the entire world.

This entails that the strengthening Yen against the Dollar will only occur once the Fed is satisfied that its fight against inflation is working – thus outside the remit of Japan itself.


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