Recently, the yen exchange rate rose significantly. Japanese yen against the U.S. dollar has continued to rise 4 months, last week, once advanced to 83.60 to 1 the highest level in 15 years. The strong yen, which reflects the global market since the second quarter, hedge funds and speculation mixed emotions, as well as Japan and the U.S. and other major economies, macroeconomic policy orientation is different.

In the second quarter, the world economic situation changes, the incentives to promote the recovery under the present inability of the successor states, particularly in the U.S. economic slowdown significantly increased risk. In this context, the global hedge fund sentiment “resurgence”, gold up, oil prices plummeted, the overall weak stock market, Japanese yen, Swiss franc and other currencies have also become the new capital “safe haven” and speculative objectives. FX trader Liu Zehong elite company said: “The sentiment on global economic worries permeated the market.”

High strength of the yen’s recent volatility, September 1 early Tokyo foreign exchange market, the yen against the U.S. dollar is still about 84 to 1 in the high and volatile. Exchange market data shows that in August the Japanese yen 16 major counterparty currencies are up there this year, has appreciated 16% since, as the major developed economies the greatest appreciation of the currency in the currency.

In addition to the yen, the Swiss franc against the euro also briefly approaching record levels against the U.S. dollar in August was up nearly 3%. Niuyuebulang Brothers Wen Ting, senior currency strategist, said: “The hedge funds have continued to flow into the yen and Swiss francs.”

Deep in financial crisis period, as the global economies in general is under attack, contrast, strong dollar, once a capital “safe haven.” However, recent changes in the market, the dollar weakened significantly, and this is the strength of the yen exchange rate is an important reason. This is reflected from one aspect the present world economic recovery, despite repeated, but the critical moment of the past is no longer the same; but also reflects the foreign exchange market speculation frequent, intense game of funds.

Recent yen strength, another important cause of market, the Japanese Government to maintain the “weak interference” stance. Market participants continue to push the yen exchange rate policy has not encountered significant resistance.

Although there have been market rumors that the Japanese yen strength will compress margins of large export companies, and a negative impact on the overall economy, but analysts say the slow pace of the Japanese Government in this regard, government officials, “evasive” attitude of most is “verbal intervention “nature.

Some observers pointed out that the Democratic Party of Japan on behalf of the election dispute could lead to slow government decision-making. Meanwhile, the Japanese government not to intervene may also have multiple considerations. First of all, if the direct market, market participants will lead to the formation of clear expectations, speculators can get through a variety of financial instruments without risk arbitrage opportunities. The latest BIS report also showed that average daily dollar trading volume on the Japanese yen has been more than 560 billion U.S. dollars, in this size market, costly government intervention in the market.

Second, the Japanese government doubts about the effectiveness of unilateral intervention in the exchange rate. Japanese yen price by the market, involving Japan and the United States and other economies, monetary policy differences. Less than expected U.S. economic recovery efforts, the Fed hinted that it might further relax monetary policy. In this case, Japan’s unilateral intervention in the market or the yen down in the short term, but it is difficult to change long-term trends. In addition, the Japanese government market intervention may lead to competing countries in the exchange rate. Given the fragile recovery of the current global situation, if the final happen, not in line with Japan’s fundamental economic interests.

In addition, many large Japanese companies in recent years, anti-risk ability and means of the exchange rate were significantly increased. While the yen continued to rise this year, but the data show that Japanese companies export situation is still good, the overall level of profitability nor any significant deterioration. Yen from the eighties of last century began to rise, but the competitiveness of Japanese companies are growing up, that their cross-border business operations, and technological barriers, use of financial instruments are inseparable.

View from the historical coordinates of the yen exchange rate has not break the current record high, the real effective exchange rate compared to a record high in 1985, about 30% lower, so the yen against the dollar in the short term there is high potential for further testing. Part of the analysis of international investment banks, taking into account the softening trend in the medium-term U.S. dollar, Japanese yen strength, or will continue for some time.

Affected by this, Japanese exporters will consider additional measures companies hedge exchange rate risk. Japan’s export-oriented enterprises in the forecast fiscal year 2010 results, the assumed exchange rate mostly in the 87 to 90 yen level than one U.S. dollar, according to statistics, if the yen against the U.S. dollar long-term level of 85 to 1 high, Japanese companies may give more consideration to the production and transfer to overseas measures, which will have an impact on the industrial distribution in Asia.

There are industry pointed out that, if the yen appreciation on Japanese Qi Ye Di affect performance extended Dao Zheng Ge Jingjicengmian, Japan Dangju or shot Gan Yu, Jie Shi Yen bulls reversal, Zijin pursue new goals, may come new market fluctuations, and thus to the relevant parties to bring a new test.

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Category: Business Management
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