Mr Khan said:
Stefan.De.Machtige said:
Train wreck said:
One of the biggest roadblocks for all Japanese exporters has been the stubbernly high rate of the yen against other trading partners for the better part of a decade. The Japanese government tried unsuccesfully to stem the Yen gains by selling yen on the open market when it reached critical levels (85Y/Dollar, day after the japanese earthquate/tsunami) but they only worked temporarly.
Back on February 15 2012, the japanese government did something different, it increased the amount of money it would print (from thin air) buy a staggering 10 trillion yen and marked a 1% inflation target (i.e. more printing in the future). These two actions, along with Japan worsening trade balances, were the rocket fuel that the japanese exporters needed and most of the stocks have been off to the races since.
The Yen went tfrom 76 per dollar to now almost ~82, the euro went from 97 to ~110(!) (both in less than a month), these are close to record moves for a months time. Unless business has deterioated significantly from December 31st (which it hasn't), analyst will start to raise earnings estimates and Sony will not report a -220B Y loss this past fiscal year due the the imporving curreny situation.
It's one less thing Kaz has to worry about in turning around the company since there is pretty much a permanment put for the curreny from here on out.
|
Wow!
That sounds like a desperate move from the japanse goverment. Their debt pile is huge already. Japan is sailing more and more into a troubled future.
|
Their high debt is troubling, but how is Japan to make tax revenue if all of their major exporters are in the red thanks to currency problems?
Of course, modest gains by companies like Sony and Nintendo won't offset these hurculean efforts altogether, but improvement on the bottom will help the government eventually, especially if you're a strong exporter.
The problem in the Japanese case is that their interest rates have been effectively at zero for a long time now. Massive money printing efforts are their only recourse for quantitative easing to have a significant effect, and something this drastic should scare off currency speculators, causing matters to slide further, faster.
|
It said it was deperate. I didn't say they had better options. They ran out of options.
Like you noted. Printing money (in those quantities) is always a slipery slope.
And don't forget: they marked out a 1% target. How long are they gonna stick with that? Goverments get addicted to the print-press very quickly. It's like giving crack to an addict.
Bold: Would that ever be enough to make that expense up? How are you seeing that?
