The Yen Factor
http://www.bloomberg.com/apps/news?pid=10000101&sid=awNin16JW6lY&refer=japan
There has been a lot written recently about the Yen carry trade and how its unwinding might impact global liquidity and markets. I don't have a feel for its historical impact on the global monetary expansion, I don't think I have read a commentator who has a definite view on this either. Opinions on the possible impact of the unwinding on the Yen carry trade extend from:
a) will have a negative influence on gloabl asset prices to,
b) will induce a global economic implosion.
I suspect we need to sit and wait for July and see what impact a 25 basis point rise in Japanese interest rates has on capital flows in and out of Japan.
It does seem relatively clear that recent global interest rate rises are starting to have a significant impact on speculative excesses and global equity markets are currently reflecting this in sideways and downwards trading cycles.
Over the next year I suspect sentiment will gradually erode as the monetary contraction takes hold and the lack of upward momentum on asset prices turns into a comprehensively downward trend.
There has been a lot written recently about the Yen carry trade and how its unwinding might impact global liquidity and markets. I don't have a feel for its historical impact on the global monetary expansion, I don't think I have read a commentator who has a definite view on this either. Opinions on the possible impact of the unwinding on the Yen carry trade extend from:
a) will have a negative influence on gloabl asset prices to,
b) will induce a global economic implosion.
I suspect we need to sit and wait for July and see what impact a 25 basis point rise in Japanese interest rates has on capital flows in and out of Japan.
It does seem relatively clear that recent global interest rate rises are starting to have a significant impact on speculative excesses and global equity markets are currently reflecting this in sideways and downwards trading cycles.
Over the next year I suspect sentiment will gradually erode as the monetary contraction takes hold and the lack of upward momentum on asset prices turns into a comprehensively downward trend.
posted by Peter at 10:44 am
1 Comments:
Thanks for the link Tony.
I could summarise my response this way:
http://en.wikipedia.org/wiki/Codependence
No nation bares the responsibility for the world's current economic predicament alone, and while I hold the US the chief economic villain for our pre-depressionary environment as they say "it takes two to tango" (and no, I am not 'anti-American'). Japan and to a lesser extent China are the key counterpoints to the US deficit re-cycling program that has been running fairly well unhindered for the last ten years.
I think the article highlights that government monetary policy (US and Asian) over the last 10 years has reflected continuous expediency and a lack the courage to turn away from the path of least resistance.
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