Japan’s Finance sector recently had to intervene in order to prevent the Yen value from hurting the US economy. The Yen had US dollar had reached a record low of 75.31 yen but since actions by the Finance minister has increased to 78.55 yen. The report by Reuters suggests that this record high in the value of the yen is being fueled by the inflow of money to Japan as a safe haven due to the uncertainty in Europe controlling its debt crisis. The Minister of Finance for Japan, Jun Azumi, reported that Japan would continue to intervene until it saw fit.
Though the US economy is recovering at an increasing rate right now other economies are doing better, which in turn could adversely affect America’s recovery efforts. However, with efforts in place in other economies to facilitate the growth of this economy things may not be as bad as they could be.
My Japanese friend told me that the exchange rate between US Dollar and Yen has got the lowest since the WW2, he himself felt pretty happy about it, since he could buy a 199$ Ipod by only paying around 3/4 of the price by Yen.
ReplyDeleteI think it will take a long time to adjust the exchange rate of Yen. Japan is also experiencing the recovery from the earthquake from last year.
This was an interesting article, it touched on a lot of things. First, people are clearly worried about the impact of the European debt crisis if they are buying up yen instead of European currency. Also, Japan's economy could still be in the balance after the disasters in the recent past. It would be bad for Japan if the value of the yen remains unstable, especially if that causes companies to pull out of Japan.
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