Thoughts On Usd-Yen Currency Exchange Rate

[tinkerteacher]

Thoughts and musings on the current USD-YEN exchange rate from a non-economist.

 

While not actually paid in US dollars, the currency I am paid in is hard pegged to the dollar, so the current best in 18 years USD-YEN exchange rates have forced inspired me to go on an ill advised prudent shopping spree of Japanese market stationary lately.

 

But, I have been thinking ... how long can these rates continue?

 

The exchange rates both help and hurt the Japanese, as, while they help boost exports and sales, much of their profits are in USD and have to be converted back to Yen at some point.

 

The USA government certainly can't be liking these rates with the huge damper it must be putting on exports and foreign sales.

 

I think the answer lies here:

 

http://www.treasury.gov/ticdata/Publish/mfh.txt

 

With over USD 6 trillion in USA government debt held by foreign governments and other actors, the USA government's hands are tied. They can't rush to reign in the USD exchange rate or the people holding their debt will also rush to cash in their gains. And, that would be a bad thing. A very bad thing.

 

So, expect these lopsided exchange rates to continue, at least for the near future.

 

Thus, I really should need to cut back on my Japanese stationary purchases, no matter how good the prices are now. Yes, I will do that just as soon as I ... immediately.

 

 

 

edit: I really should have posted this in 'Market Watch', but cannot. Sorry about that. Moderators please excuse a newbies' follibies.

Edited March 23, 2015 by tinkerteacher

[Anachronos]

Well, did you go on that shopping spree? Reason I am asking is that I am also thinking about a little "spree" myself with the new rates, but haven't seen any real change in prices of goods from Japan. Have you notice any real changes? Maybe it just takes time for new exchange rates to work their way through the retail system.

Edited March 24, 2015 by Anachronos

[tinkerteacher]

Well, did you go on that shopping spree? Reason I am asking is that I am also thinking about a little "spree" myself with the new rates, but haven't seen any real change in prices of goods from Japan. Have you notice any real changes? Maybe it just takes time for new exchange rates to work their way through the retail system.

 

Assuming you're a NAmerican, you're probably not seeing it on your end as the savings haven't yet or won't ever work themselves down the food chain from Japan.

 

But (or rather don't if you want to maintain the illusion of financial prudency) check out the prices online from Japanese market retailers like those on Rakuten Global. In USD terms their prices have fallen 10-15% in the last few months. Scarily tempting.

 

edit: fixed percentages, pesky yen-usd conversion math

Edited March 24, 2015 by tinkerteacher

[Anachronos]

Thanks,

Of course I won't check the prices from Japanese Retailers

[tinkerteacher]

Good choice. Your wallet will thank you.

 

Definitely also don't check out European market retailers like Fontoplumo. The 25-35% drop in USD prices over the last few months is even more dangerously tempting and could lead to a seriously depleted bank account.