Japan DPJ Election Win and the Consequences for USD

Discussion in 'Economics' started by Sodajerk, Aug 30, 2009.

  1. Sodajerk


    Japan DPJ Election Win Brings 'Bloodless Revolution'
    31 August 2009

    The Democratic Party of Japan swept to power for the first time as the nation's voters turned their backs on half a century of single-party government that failed to reverse economic stagnation and spiraling welfare costs.



    Japan 'would avoid dollar bonds'
    BBC News
    12 May 2009

    Japan's opposition party, leading in polls ahead of next month's election, said the nation should consider shifting its $1 trillion of foreign reserves away from the dollar and buying International Monetary Fund bonds.

    "In the medium to long term, we need to do what we can to avoid the risk of currency losses or economic turbulence that could result if the dollar were to swing," Masaharu Nakagawa, the shadow finance minister in the Democratic Party of Japan, said in an interview in Tokyo on July 9. "Many countries are starting to diversify their reserves."


  2. Thanks for the links. I know that a lot of countries are required to borrow in the lenders currency. I expect that China and Japan could demand that US borrowing is in their respective currencies this would pressure overdue economic reform in the US of A.

    I've been actively moving USD to currencies supported with sound fiscal policies and higher i-rates....following the Japanese housewives lead (carry trade).

  3. Holy Moly....has USD/JPY dropped below 93....is that 92.87 print
  4. Sodajerk


    Corrected excerpt from the second linked article (same basic idea, except more so):


    Japan 'would avoid dollar bonds'
    BBC News
    12 May 2009

    Japan's opposition party says it would refuse to buy American government bonds denominated in US dollars, if elected.

    The chief finance spokesman of the Democratic Party of Japan, Masaharu Nakagawa, told the BBC he was worried about the future value of the dollar.

    Japan has been a major buyer of US government bonds, helping the US finance its Federal budget deficits.

    But, he added, it would continue to buy bonds only if they were denominated in yen - the so-called samurai bonds.

    "If it's [in] yen, it's going to be all right," Mr Nakagawa said in an interview with the BBC World Service.

    "We propose that we would buy [the US bonds], but it's yen, not dollar."

    However observers say that, while the move would be a remarkable policy shift, it was unlikely that Mr Nakagawa's party will win the forthcoming election, due before mid-September, despite the unpopularity of the ruling Liberal party.


    The selection in the OP is from another Bloomberg article on the same subject.
  5. Sodajerk


    Yep. USDJPY down 1 percent since the news broke.
  6. Short Nikkei since it broke 10700 to the upside and speculated that currency traders are a bit better informed than equity traders. And the winners are : currency traders and me. :p

    If I am not wrong,we might see 10275 today.
  7. Sodajerk


    The Shanghai Composite Index dropped 6.75 percent after this.
  8. Lethn


    Why is everything the Japanese attempt to accomplish so damn awesome?
  9. Sodajerk


    Natural awesomeness?

    The yen has continued creeping up since this happened, btw.
  10. Lethn


    I'm going to bloody move to Japan if they keep up their policies like they promised, less bureaucratic power? After experiencing 19 years of nothing but bureaucratic incompetency and corruption It would be like I had died and gone to heaven.
    #10     Sep 2, 2009