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BOJ's Kuroda tries to talk down yen

  • Describing the U.S. economy as "recovering very strongly" and stronger than Japan, BOJ Governor Kuroda says, "In this kind of situation, I don't think it's reasonable to expect the yen to appreciate against the dollar."
  • He also sees the yen as "still quite strong" vs. the euro compared with where the pair stood ahead of the financial crisis (the current ¥140 vs. ¥169 before Lehman).
  • Kurdoa's talk-down of the yen comes a couple of days after his optimistic comments on the Japanese economy and a signal he was not planning additional monetary ease sent the currency higher.
  • Dollar/yen is ahead 0.25% on the session at ¥101.98.
  • ETFs: FXY, YCS, JYN, YCL
Comments (1)
  • Viper740
    , contributor
    Comments (126) | Send Message
     
    If inflation hits 2%, interest rates on Japanese gov't bonds will have to be raised higher than 2%, or else their purchasers will be losing money due to inflation. Yet, if interest rates are raised to higher than 2%, the Japanese gov't would have to pay so much money servicing interest on its debt that it might cause their fiscal situation to explode.

     

    Basically, they are in very bad shape no matter what happens.

     

    How does Mr. Kuroda propose solving this dilemma?
    23 May, 10:05 PM Reply Like
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