Japan Economy Minister: "Yen's Excessive Strength Has Been Largely Corrected; Further Weakness Could Be Harmful"

Tyler Durden's picture

As if sniffing at the threat the ongoing collapse in JGBs, culminated by Toyota pulling a bond issue on soaring yields, which forced even JPM to come out with an ominously titled piece called the "VaR Shock" driven by the epic plunge in the Yen, Japan's economy minister Akira Amari has hit the wires saying "the yen's excessive strength has been largely "corrected," and further weakness could be harmful, Japan's economy minister said Sunday, suggesting the Japanese government may be happy with the currency's current level. Economy minister Akira Amari, responding to a question on how far the yen should weaken, replied that while he couldn't comment himself, "it's being said that the correction of the strong yen is largely completed. If the yen keeps on weakening a lot more, it will have a negative impact on peoples' lives."" Now the question is will those millions in Mrs. Watanabe housewives suddenly stuck in margin calls scramble to take profit, which could send the USDJPY soundly back into double digit territory, or will the momentum machine, facilitated by Getco's relentless scramble to perpetuate momentum ignition and drift, mean Japan has officially lost control of the Yen, and in a world in which only the BOJ's actions matters, will USDJPY 120 be next, together with the even greater "negative impact on people's lives" such a move would have (but not for those buying apartments at the yet to be built 432 Park).

From Nikkei:

Mr. Amari was speaking on a Sunday television talk show on national broadcaster NHK.


His comments come after the dollar appreciated past Y103 for the first time in four years Friday, marking a 3% gain in the past week alone, and a 30% rise since mid-November, when Prime Minister Shinzo Abe started his successful campaign for office on a pro-growth, weak-yen platform.


Mr. Abe and his ministers had argued that the yen had been too strong versus currencies like the dollar and euro since the global financial crisis sent the currency soaring in 2008, pummeling Japan's big exporters, which found their Japan-made goods suddenly much costlier in the world's markets. "Correcting" that problem -- as Mr. Abe and his cohorts put it -- was an important goal of the government's economic growth policies, which called for aggressive monetary easing, fiscal spending and deregulation.


But the last several months' depreciation has left the yen near pre-crisis levels, and Mr. Amari's remarks suggest that the government may now be switching its concerns to what would happen if the yen continues to weaken. Although a weak yen boosts profits at exporters, it also raises the cost of imports -- most notably fuel, which Japan has been buying in increased amounts since Japan's 2011 nuclear accident effectively halted operation of most of the country's nuclear power plants.


If a weakening yen does have a negative impact on living costs, "it's our job to figure out how to minimize that," Mr. Amari also said. As examples, Mr. Amari touched on the possibility of importing shale gas from the U.S. and restarting nuclear reactors.


Mr. Amari also sounded a cautious note on Japan's surging stock market, which has jumped 45% so this year, largely on the weakening yen and hopes that depreciation will boost the fortunes of big Japanese manufacturers. Last week the benchmark Nikkei 225 Stock Average breached 15,000 for the first time in over five years.


The stock rise "has been a bit faster than we'd expected," said Mr. Amari.

You mean a central planner could not correctly anticipate what would happen when the latest and greatest Pandora's box of asset bubbles is opened? Surely that's would be a first: as long as the "USDJPY is contained" all is well.

Perhaps Kuroda also just needs 15 minutes of jawboning to put the inflation genie back into the bottle.

Good luck with that.

And good luck turning the epic momentum juggernaut around: you will need it. Unless of course the even more epic short covering the may be unleashed takes the USDJPY lower by some 20-30 big figures, and Abenomics quickly ends where it started: with yet another Prime Minister resignation, and the central-planning emperor is found to have been naked all over again.

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economics9698's picture

"The yen's excessive strength has been largely "corrected," and further weakness could be harmful, Japan's economy minister said Sunday

No shit, fucking clueless.

williambanzai7's picture

Too late, the loose fire house is already flying around.

economics9698's picture

Who said stopping inflation was like putting toothpaste back in the tube?  

Good luck with that. 

Bay of Pigs's picture

"it's tough to put the toothpaste back into the tube once it's out"

H.R. (Bob) Haldeman

ekm's picture

Of course, Brent Vigilantes attacked.

fonzannoon's picture

it's so obvious even a fonzannoon can see it coming.

Yen Cross's picture

      Further ¥ weakness could be harmful.  ROTFLMAO<

Never One Roach's picture

I bet those Kobe steaks are uber expensive these day.....and how about the Fuki on toast.....


what a mess.....

GoldForCash's picture

Milk (regular), 1 liter 1.94 $ 1.82 2.33
Loaf of Fresh White Bread (500g) 2.08 $ 1.45 2.91
Rice (1kg) 4.60 $ 3.39 4.85
Eggs (12) 2.30 $ 1.94 3.68
Local Cheese (1kg) 19.39 $ 7.75 29.08
Chicken Breasts (Boneless, Skinless), (1kg) 9.50 $ 6.59 9.92
Apples (1kg) 5.33 $ 4.17 8.55
Oranges (1kg) 4.36 $ 3.88 8.55
Tomato (1kg) 7.95 $ 5.82 9.69
Potato (1kg) 3.39 $ 2.85 4.85
Lettuce (1 head) 1.94 $ 1.45 2.13


fonzannoon's picture

it's just talky talky. time for the bond market to call his bluff.

Al Huxley's picture

That's all that is required to fix anything these days.  I'm really surprised they haven't fixed up Fukushima that way - you know, just have the minister of the environment or whoever the fuck it is come out with a statement along the lines of 'the reactor's been leaking radioactive poison for a sufficiently long time.  Further leaking could be detrimental to the health of our citizens', and there you go, it's all fixed up.

suteibu's picture
16 December 2011

"Today the Japanese government announced that three reactors that suffered meltdowns in early March had officially reached “cold shutdown”.

At least, that was supposed to have the effect you're talking about.

knukles's picture

cold shutdown...
Meaning shits melted all the way through to the other side of the Earth and's starting to come out in Assumption Parish, Louisiana....

NoDebt's picture

Exactly.  That's what they mean when they say a situation is "under control."

What a cluster fuck.  Seems like just a few weeks ago they were laying out plans to double the monetary base over the next year or two.  Now it's all done?  Perhaps reverse course?

When you slam a car rapidly between Drive and Reverse while holding the pedal to the carpet, you break shit.  That seems to be about what they're doing.

ekm's picture

Bond markets died when govs started to buy all of them.

q99x2's picture

Restart Fukushima. I'm all for that.

css1971's picture

Oh well. I'm sure everyone will stop trying to get their wealth out of the country immediately.

resurger's picture


slowly........then suddenly. abe n kuroda they dont give zero fucks about pplz lives.



vegas's picture

Just a gentle reminder to Mrs. Wantanabe and her pals, along with the corporates types (Sony anyone?) that maybe it is time to take some saki off the table. Let the Sunday night carnage begin.




Yen Cross's picture

    Kampo(postal system) , is shiting tungsten bricks right now.

lolmao500's picture


Report: Syrian Army Aiming Missiles at Tel Aviv

The Syrian army has begun deploying advanced surface-to-surface missiles and has aimed them at Tel Aviv, the British Sunday Times reports.

According to the report, Syria is preparing to strike Israel in case the Jewish State launches another attack on its territory.


Netanyahu: We’ll continue to halt Syrian arms transfers

Amid escalating rhetoric between Jerusalem and Damascus in the wake of reported Israeli airstrikes in Syria, Prime Minister Benjamin Netanyahu vowed Sunday to continue to act to prevent advanced weaponry from being transferred to Lebanese terror group Hezbollah via Syria.

Only a matter of time before it really hits the fan...


While the Chicoms are cooking their numbers A LOT...


China Has Been Inflating Its Exports Numbers All Year, In Some Cases Doubling The Actual Figures

China has over-reported its exports for the last five months, inflating the apparent demand for its products overseas, according to a new research report.
Official customs data showed a surge in exports, but imports reported by trading partners don’t match up. Capital Economics, a research firm, estimated the actual exports expanded only half the 17 percent year-over-year rate reported by customs for the first four months of 2013.

ApollyonDestroy's picture

I've been waiting a long while for this to get awesome. Patience really is a virtue. Things are beginning to look pretty awesome

debtor of last resort's picture

Well, i guess i don't have to wait until 2014 to switch from pm's to canned beans.

Soja-etf, anyone?

NipponMarketBlog's picture



Too much of a good thing? Careful what you wish for.....

The genie has been let out of the bottle. There's nothing they can do to get it back in - barring absolutely massive (and ruinous) levels of forex intervention.


It is amazing how misgiuded the Japanese government is. Micro-management of currencies (or indeed economies) simply isnt possible once confidence in the 'mis-guiding hand' has been shaken or removed.

Someone didn't read his Ludwig Von Mises.




BigInJapan's picture

Good lookin' blog.
Always nice to find somebody reading from the same page of the hymnbook.

Voltaire's picture

what does this mean for stocks? If the Usd/yen trade is off do we have a game changer now?

electricgorilla's picture

Silver is getting straight destroyed right now....sheesh

bobert727's picture

Seems like deja vu all over again.....said the same thing back on January 3rd!!