Post Tagged with: "Japan"
Jobs and deficit crisis will lead to double dip and more downgrades
Former Fed nominee and Nobel Laureate Peter Diamond spoke to Bloomberg News about how he sees the economic difficulties the United States faces. His view is that America faces a jobs crisis in the here and now and that deficit reduction is a longer-term problem
The yen is a safe haven as Japan is the world’s largest creditor
The yen is a safe haven. That assertion seems so obvious, that why it is the case is rarely explored. It does not seem to be a function, as some suggest, of its trade surplus, but rather its position as a net international investment surplus country. That means that Japanese investors own more foreign assets than foreign investors own of Japanese assets. In fact, Japan is the world’s largest creditor. Last year, it was in surplus by over $3 trillion. China is the world’s second largest creditor at about $2.2 trillion and Germany is in third place with a $1.2 trillion surplus. Next are Saudi Arabia and Switzerland
US real 10 year yields at record 225bpt discount to JGBs
PIMCO, the world’ largest bond fund call this suppression of yields financial repression because it means savers and bond investors get negative real returns. However, John Hempton pointed out that in Japan, where this monetary policy is well-advanced, deflation has set in and real yields are positive despite the zero-rate interest policy (ZIRP)
Notes from a Private Briefing with the Bank of Japan
The Bank of Japan held a private briefing with a small group of analysts from leading financial institutions in their NY rep office. The Director-General of the Research and Statistics Department led the presentation. This column summarises insights from that meeting
Mrs Watanabe has amassed a large short yen position
Something interesting is being played out. Margin traders–the famed Mrs Watanabe– at the Tokyo Futures Exchange–have amassed a large short yen position. There are about 900k short yen contracts as of today and about 364k are short yen against the dollar. This is the largest short yen long dollar positions since
How to Think about Currency Intervention Risks
Officials from Japan and Switzerland have stepped up their rhetoric protesting the price action that has propelled their respective currencies sharply higher. Contrary to market anxiety the risk of intervention remains low and lower for the SNB than the
“Don’t listen to Hugh Hendry. He’s a loser.”
Below is a nice little interview with Hedge Fund manager Hugh Hendry . The headline quote was his way of showing us he doesn’t take himself too seriously. But his underlying message is that he believes it pays to really massage the most contentious issues and take a view on those. If you do have a contrarian view, it will be backed by more rigorous analysis such that you can be better assured of a decent return in down markets. Right now, one of his most contrarian bets is Japan
Tankan and Beyond
Japan is set to release a slew of economic data on July 1. Of these the jobless rate is probably the least important. It is lagging indicator, though softness in the job-to-applicant ratio would warn of no quick improvement. On the other hand, the recovery in retail sales in May suggest overall household spending is beginning to recovery from the sharp contraction
The impotence of monetary policy
For my part, I am with Richard Koo. Monetary policy reflation will not work in a balance sheet recession when fiscal policy is contractionary. But at some point, the Fed will be compelled to act anyway
Roach: Return of the Living Dead
Rather than adding stimulus with the aim of goosing demand to help the economy reach escape velocity, I would say that the central objective of economic policy is to help the economy reach full employment. Doing so will increase demand, increase output, and cut budget deficits tremendously. Policy makers should do this while aiding the economy in reallocating scarce resources to areas that will sustain longer-term productivity growth. In America, that means less resources in finance and housing and perhaps more in technology and infrastructure
Chart of the Day: How Deep Was Your Recession?
I mean to ask how deep the downturn in your country was. On Tuesday, Martin Wolf had a good graphic on this. The upshot of his analysis is that while US GDP growth compares favourably to Japan and Western Europe, its unemployment compares unfavourably to Germany in particular
Fukushima Daiichi Disaster Prompts Closure of Another Plant
As workers continue to battle with the crippled Fukushima Daiichi Nuclear Plant, more impacts from the worst nuclear disaster since Chernobyl are starting to arise. The latest impact will hit car manufacturers, with plants in central Japan hit the hardest: power firm Chubu Electric has agreed to shut its Hamaoka Nuclear Plant until it can build better defenses against the kind of massive earthquake and tsunami that hit on March 11, and Hamaoka provides power to at least 15 auto plants