Re: [A-List] Yen Crisis

["Anne Williamson" <annewilliamson@xxxxxxx>]

Indeed, an interesting year it will be.  An additional wrinkle
is that the US would like the Japanese to buy up dollars and
T-bills to make up for other foreign money exiting the US --
which, of course, will further stress the yen's value, and
therefore make the money game that much more lively.  So
many interests, so many conflicts, like circling wolves
they are. -A.

----- Original Message -----
From: Henry C.K. Liu <hliu@xxxxxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>; <TheNewForum@xxxxxxxxxxxxxxx>;
<gang8@xxxxxxxxxxxxxxx>; <a-list@xxxxxxxxxxxxxxxxxxx>
Sent: Wednesday, December 26, 2001 12:30 AM
Subject: [A-List] Yen Crisis


> "The sustained depreciation of yen exchange rate will cause currency
> devaluation in many countries in Asia," predicted Dai Xianglong, the
> president of the People's Bank ofChina (PBOC) on April 2, 2001.
> According to him, the predicable depreciation of Japanese yen will put
> impact on RMB, the currency of China, fixed at 8.2 to the dollar
>
> Yesterday, December 24, 2001, the yen fell to 130.76 to the dollar,
> reaching a new three year low since 1998.  The official People's Daily
> carried an artivcle warning excessive yen devaluation as threatening a
> new round of competititve devaluation among Asian currencies, causing
> all Asian economies into new distress.
>
> The yen has fallen by more than 4 per cent this month on a growing
> belief that the authorities are willing to see the yen depreciate to
> ease the struggles facing the country's beleaguered exporters.
> Previously, officials have hinted to the market when they are satisfied
> with the levelof the yen by threatening action if the currency's moves
> become too dramatic.
>
> The Japanese Finance Minister remarked recently that further falls of
> the yen would be consistent with Japanese efforts to restructure its
> economy.  The market interpretes these remarks as Japanese government
> allowing the yen to fall to lower levels. The market anticipated the yen
> to reach 135-136 levels within the next few months. With IMF and US
> acquiesence, the yen may well fall to 160-170 levels.  In August 1998,
> when the yen reached 147, Beijing threatened to devalue the RMB.
> Washington and Tokyo staged a coordinated interevention to reverse the
> yen's fall. The US wants to yen to stay above 120 and Japan wants the
> yen to fall below 120.  But 160-170 would mean a total realignment of
> the foreign exchange regime in Asia.
>
> Its going to be a very interesting new year.
>
> Henry C.K. Liu
>
>
>