Yen Reaches 13 Year high

In 2004 the Japanese government spent the equivalent of $300 Billion to hold down the value of the Yen. The Yen recently achieved a 13 year high against other major world currencies. The performance of the Yen is impressive since the Yen has performed positively while almost every other currency has collapsed relative to the US dollar.

Strong Yen Drives Up Prices

Despite comments by the Finance Minister, the Japanese government is unlikely to intervene on behalf of the Yen in global interbank Forex markets. The G7 countries have urged Japan to allow the market to run its course. The US government hopes the weaker Yen will help to restore American export competitiveness. The Asia Times stated, “Japan will be criticized internationally, especially by the US, the country’s strongest ally, if it acts to stem the currency’s gain as US automakers are still on the brink of bankruptcy. The stronger yen drives up the price of cars imported to the US.”

Japanese Finance Minister Watching Markets With Alarm

The Yen’s appreciation has prompted high level meetings between world global economic and political leaders. Interbank Forex experts are watching closely to confirm that the Japanese government does not intervene in Forex markets. The Japanese Finance Minister recently stated that he is watching Forex markets with alarm causing many interbank Forex traders to speculate that the Japanese government may once again intervene in currency markets.

Japan’s First Trade Deficit in 30 Years

The recent economic news from Japan has not been good and Japanese exports have plunged, inducing the country’s first monthly trade deficit in almost three decades. Japanese corporate profits are down as a result of unfavorable forex conversion losses caused by the Yen’s performance on currency markets including the Interbank Forex. Unemployment figures in Japan are expected to set a new record. Japanese exports have plunged, inducing the country’s first monthly trade deficit in almost three decades.

Both the Japanese Yen and the US dollar have performed well on interbank Forex markets despite the global economic crisis. It remains to be seen just how long both currencies will hold their ground on world currency markets.