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Careful What You Wish For: Plunging Yen Leads To 140% Surge In Bankruptcies
Due to the depreciation of the JPY, leading to soaring raw material costs (crushing SME profitability), TSR reports that Japanese bankruptcies year-to-date in 2014 are up a stunning 140% having unerringly surged since Abenomics was unleashed. Despite constant reassurance and propaganda from various political leaders each and every night that Japan is on the right track... it simply is not and if there is a better indicator of the death spiral Abe has unleashed than surging bankruptcies, we are unaware of one.
Bankruptcies are soaring since Abenomics began...
By industry, 81 of the transportation industry such as automobile cargo transportation industry (composition ratio 37.9%) is at most, fuel prices remain high is affected. Next, review the manufacturing industry 44 (20.6%), Wholesale 41 (19.2%), service industries other 19 cases (8.9%), and has spread retailing 11 (up 5.1%) in a wide range of industries.
Depreciation of the yen impact leads to soaring raw materials, profit deterioration deplete the strength of small and medium-sized enterprises. In addition to the deterioration in earnings, depending on trends of the future of the exchange rate, are also concerned about such further sales slump due to price competition.
“We’ve seen that the threat of an exchange rate weaker than 110 yen per dollar made a lot of people uneasy, so if the yen were to strengthen to 105 per dollar, I doubt we’d hear any complaints.”
A survey released last month by the Osaka Chamber of Commerce and Industry showed the majority of respondents viewed an exchange rate of 95-105 yen per dollar to be ideal. Japan Chamber of Commerce and Industry Chairman Akio Mimura said this month a “pleasing” level for the yen would be 100 per dollar, Kyodo reported.
An increasingly weaker yen won’t necessarily benefit Japan’s large exporters. Nintendo Co. booked a 15.5 billion-yen ($142 million) gain in the fiscal first half from the lower currency.
The median forecast among analysts surveyed by Bloomberg News is for the currency to weaken to 114 per dollar by the end of 2015 as U.S. and Japanese monetary policies diverge. It hasn’t been that weak since 2007.
Even though Abe and his cronies are starting to wake up to the reality...
Prime Minister Shinzo Abe said on Oct. 7 that yen depreciation is hurting small companies and households, almost two years after triggering the currency’s slide with a call for unlimited monetary easing to end deflation.
Little more than a week later, Kuroda said a weak yen can depress the non-manufacturing sector and real incomes, before reiterating on Oct. 28 that declines in the currency have been positive overall for Japan’s economy.
...
Confidence among small businesses unexpectedly fell this month, according to a survey of 1,000 companies by Shoko Chukin Bank released Oct. 28. The measure languished for a seventh month below the line that signals a balance between optimists and pessimists.
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And so - if you are betting on NKY strength... reliant on JPY weakness... think again. Abe and Kuroda are boxed in.
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A plunging currency begets rising exports and bankruptcies are like broken windows. It's all great!
-Paulie "Walnuts" Krugman
if I had one wish it'd be the guys on the The Hedge would stop making fun of me
OT, but truly "shocking" news:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/30_P...
Having spent time there (Zurich) with the locals I think we will be pleasantly surprised with the outcome. They truly hate being messed with/outside interference. The red shield bank may have overreached on this one...especially emboldened after the lame Scotland referendum.
I think I can safely speak for all Japanese when I say...
Ruh roh...
Even the radiation fiasco cannot get the comatose japs out into the street.
'Cause they're all fuckin' dead, mate! Just wait till the Ebola becomes pandemic. Everybody'll be running around with their hair on fire, swapping spittle and beetle-juice, screaming about their unalienable rights, hugging and kissing, opening their homes to strangers for free unprotected sex....
Household spending at -5% today. That inflation purchase urgency doesn't seem to be playing out.
How does one say fucked in Japanese? Actually, the Japanese may want to learn how to say it in Chinese.
An American, not US subject.
"Are the Chinese still pissed about the war in Manchuria?"
Nah. They forgave the Japs a few years ago when the Japs took all the Comfort Ladies still living in Manchuria on a free weekend bus tour of the Yasukuni Shrine
Lemme tall ya'll sumptin' else whatchu wish for
The View (Rosie O'Donnell) is becoming a NEWS PROGRAM
http://variety.com/2014/tv/news/abc-news-takes-over-the-view-as-ratings-...
Hah ha ha ha ha ha ha
maniacal laughter
"One of his central goals, according to insiders, is to make “The View” more appealing to younger viewers."
Yes, and the way to do that is to incorporate with ABC news.
Japan has gone over the edge into the abyss. It is clear that the prospects for Japan are lousy. The writing is on the wall. Japan is facing a wall of debt that can only be addressed by printing more money and debasing their currency.
This means paying off their debt with worthless yen where possible and in many cases defaulting on promises made. Japan's public debt, which stands at around 230% of its GDP and is the highest in the industrialized world. They are past the point where they can return to a "free and fair market" interest rate marketing their bonds to the world and still be able to pay the debt service.
The moment the Japaneses stock market fails to rise enough to offset inflation and the people of Japan realize that even a weaker yen will not help we will see a tsunami of money fleeing Japan. This will constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . When Japan crumbles it will be felt across the world. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html
OK bruce. I agree with you on this one. If only they would have cut loose the zombies in the 1990's they wouldn't be in this pickle. The can doth been kicked to the cliff...and what did it cost? A lost generation.
Will we letour zombies die instead of following Japans footsteps? (Looking at you citi). Nope. Must not admit defeat. Stiff upper lip and all.
I can turn those orange lines into green shoots for you, Japan, if you just give me about a minute to crack open Photoshop...
Coming to A-Mer-iKa...
Let's see, print more money, raise taxes, have media say everything is great, uhmmm, take the country as close to war as a distraction and an excuse for continued existance in office? What could possibly go wrong?
Just print more until all the yen goes up in the fiat inferno. The US follows.
After Japan crashes and burns -
I bet many USA economists will claim the reason it failed is because they did too little money printing and deficit spending -
Krugman already says that about the US.
The current policy is the Krugman recommended policy to the Japanese Finance Ministery 10 years or so in the past.
The price of gold in Yen hasn't changed for years. Hmmm
Obviously Abe isn't doing this right. In the last year of the Weimar hyperinflation, there were exactly ten (10) bankruptcy filings in the whole of Germany! No one went broke because the ever increasing flood of fresh money constantly devalued their debts to insignificance.
Weimar Germany was not 100% dependant upon imports to create exports.
Generally, Weimar Germany did not have to rely upon imports for sustinance of the population.
The people of Germany may not have filed bankruptcies as their notional debts were inflated away. They simply could not afford food, no matter how debt free they were. Street People in the US have no reason to file bankruptcy either.
Any time your business needed to buy materials or pay wages, you could borrow marks from a bank at 10% monthly interest (when prices were rising 10% a day), and that bank would immediately re-sell your debt to the central bank. Even small banks could essentially print money for any purpose whatsoever. Jews had a great time with this because many of them had just immigrated from the east, where hyperinflation hit sooner, so they understood exactly what was happening.
Well gee golly. I thought people were suppose to rush out, and enjoy the new high prices. We were told that inflation, more correctly, high prices were something every Japanese citizen should be joyful about paying for higher prices. I guess the inflation growth story didn't pan out. May be the prices were not high enough????
"And so - if you are betting on NKY strength... reliant on JPY weakness... think again. Abe and Kuroda are boxed in."
The suggested box has no bottom. The rising water from the currency flush will take it away.
Why do they use yen? Do these people have nothing larger? Surely they can come up with a currency that gives you reasonable numbers when you're calculating shit...How do these people balance a frickin' checkbook? What are they, insane?
Healthy. Japan has hundreds of zombie companies that needed tho die.
Well at least the wheelbarrow companies should be doing well, wallet just won't be big enough soon.
Some peaple never learn...
Bank of Japan Governor Kuroda Surprises with Stimulus Boost as Japan Struggles
http://www.bloomberg.com/news/2014-10-31/boj-unexpectedly-boosts-easing-...
BANSAI!!!!
Japanese economy is the scariest.
Fukushima is the scariest.