http://www.forexconspiracyreport.com/cheaper-yen-makes-koreans-angry/
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. The Taipei Times reports as South Korea warns Japan.
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.
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.
While the BOJ didn’t adjust rates at its previous meeting, it clearly notices that its economy is languishing.
4. http://www.forexconspiracyreport.com/cheaper-yen-makes-koreans-angry/
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