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The Yen Confusion Of The U.S. Department Of The Treasury

Who's on first at Jack Lew's Treasury? That's not the set-up for a joke. It's a serious question after the latest Treasury warning that Japan shouldn't weaken the yen invest in share too much, which follows U.S. pleading with Japan to weaken the yen. So which is it?

It was reported late last week, the U.S. Treasury Department to submit the latest issue of "international economic and exchange rate report to Congress (a currency report," said the second half of 2012 to early April 2013). In the report, the U.S. Treasury Department warned, will pay close attention to the large-scale asset purchase policies taken by the Japanese government to stimulate domestic economic needs, while the Ministry of Finance will also continue to put pressure on Japan "designed to give the Japanese do not take against other country yen "competitive devaluation" policy. In addition, the U.S. Treasury said that as a member of the G7 and G20 members let the market determine the exchange rate will be urged, noting that Japan should relax domestic monetary policy through the purchase of foreign bonds.

Quantitative easing in the United States and Japan to boost domestic flagging economy, also recently opened the "printing press", and the scale and intensity than the United States. Since the introduction of quantitative easing since the Japanese yen against the U.S. dollar depreciated from 93 fell nearly 100. According to statistics, late on Friday, the yen against the dollar hits a high of 98.37.

Some analysts pointed out, the U.S. Treasury warning in the latest report; invest in share is the response to the depreciation of the yen. U.S. Treasury Department believes that the easing of the Bank of Japan to weaken the yen may increase the US-Japan trade imbalance.

Fed Chairman Ben Bernanke also expressed his dissatisfaction with Japan's quantitative easing program. Recently, he insinuated in his speech asked, "The ability to adapt to the new environment of monetary policy in the United States" and other countries "is equivalent to competitive devaluation" as? His answer was, "the two are completely opposite concept, because monetary policy is suitable for large advanced industrial economies of the new environment, the policy will not bring these countries large-scale and sustained change in exchange rates."

Before the implementation of quantitative easing in Japan, including Bernanke, including senior U.S. government has urged the Japanese government to implement stimulus measures designed to defeat deflation.

Well, the Japanese should listen to the United States which suggested it?

Frankly, the real problem is that of the United States finance their own idea itself is self-contradictory: the U.S. wants a weak yen, but do not want a weak yen could hurt U.S. exporters.