Yen Strengthens to Record Against Dollar on Radiation Concern

[villager]

Source: Business Week

Yen Strengthens to Record Against Dollar on Radiation Concern

By Charles Mead and Catarina Saraiva

March 16 (Bloomberg) -- The yen rose to a post-World War II high versus the dollar risk of radiation leaks from crippled nuclear plants in Japan added to speculation insurers and investors will redeem overseas assets to pay for damages.

The four-day rally in the yen prompted speculation the Bank of Japan may intervene for the first time since September in an effort to counter repatriation flows and shore up the competitiveness of Japanese companies. The yen erased earlier losses after Tokyo Electric Power Co. said a reactor containment vessel may have been breached at the crippled Fukushima Dai-Ichi power plant, deepening Japan’s nuclear crisis and increasing the risk of radioactive leaks.

“It’s a mix of risk aversion and repatriation that’s driving the yen to strengthen,” said Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut. “If there is repatriation coming back to Japan, the stronger yen is making it even more expensive to purchase yen.”

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Read more: http://www.businessweek.com/news/2011-03-16/yen-strengthens-to-record-against-dollar-on-radiation-concern.html

[Ikonoklast]

1. Death for an exporting economy.

[villager]

3. Good point - fewer Toyotas to be made, and those that are -- more expensive!

n/t

[petronius]

2. So that means that everything in Japan becomes relatively more expensive, right?

Particularly everything brought in from overseas, or anything that relies on an imported product?

[Ikonoklast]

4. ...and Bingo was his name-O!

Eggzackly.

It's a Catch-22, bring home yen to rebuild, selling dollars, marks, whatever, but in the process you make your exports more expensive.

That could stifle any economic recovery they hope to stage.

[Lucky Luciano]

5. Who knows. At this stage, they have a lot of reconstruction to do at home.

So a big part of their export driven economy could be replaced by the rebuilding - and with a stronger yen, they can get the raw materials they need to import for cheaper prices. Have not a real analysis, but this could offset the loss in exports at least.


The move in yen after 5 pm was fucking insane. I literally had to shout put quite loudly, "What the fuck is going on with the yen???!!!?!!"

[Ikonoklast]

7. Panic, emotion, irrationality.

Haven't seen any estimates as to just how much money for rebuilding they are talking about, it has to be in the high hundreds of billions, at the very least.

[madrchsod]

6. more jobs for the us workers..for at least a few months

us production lines are running short of bits and pieces from japan. there is a concern with the us assembly plants might stop production with in a few weeks

they could move production lines to the usa to keep production flowing. toyota makes the most profit by making and selling cars in the us market.

[Ikonoklast]

8. Lots of commonality in production.

Major disruptions in the supply chain.

Prius are only built in Japan, for instance, there is no real way to transfer that entire line.