The Yen is going up in value! Now 76 yen = 1 dollar!

[Bonobo]

Can someone explain this to me?

I thought it would get weaker, not stronger!

[KeepItReal]

1. Japanese govt pumped BILLIONS into their market

There is an expectation of Japanese companies selling overseas assets also

[suffragette]

2. I'm so glad to see you

I was worried after hearing about the aftershock in your area.

[nadinbrzezinski]

3. Central Bank pumped close to two billion

from what I read.

Good to see you by the way

[notesdev]

5. a hundred times that

Y18 trillion ~= $225 billion

[nadinbrzezinski]

7. I stopped watching at two

YIKES

[Bonobo]

10. More currency in circulation = inflation normally, no? nt

[nadinbrzezinski]

14. Long term, short term is stabilizes it

[notesdev]

4. People in Japan need Yen to spend right now

Supply and demand... demand for Yen just shot through the roof.

[dipsydoodle]

6. I had a similar problem

trying to understand why it is than when they start rebuilding their GDP will go through the roof.

Explanation of your point here. http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4774080

:hi:

[FLAprogressive]

8. Doesn't that mean the dollar is stronger compared to the yen?

[Bonobo]

9. No, the opposite. nt

[Old and In the Way]

11. Japan is dumping foreign investments, like US Treasuries, to raise

capital for their emergency. No surprise that the yen would increase in value as the dollar loses ground.

[Cali_Democrat]

12. Actually, other currencies are falling even more against the Yen

Look at the AUD/JPY or NZD/JPY.

Three things going on.

1) Money is flowing back into Japan in preparation for cleanup, reconstruction and rebuilding. This is driving up the value of the Yen as demand for Yen increases.

2) People are unwinding carry trades. This is likely as well when you consider the fall of the Australian and New Zealand currencies. Carry trades are when people borrow money in an overseas currency (Yen in this case) because that country has lower interest rates. This makes it cheaper for people to invest in higher yielding assets in other countries. People are now unwinding this. Closing their positions by buying Yen. This is leading to a sharp rise in the Yen.

3) The volatility in world equity markets is leading to flights to safety. Historically, the Yen is considered a safe haven currency and a currency like the euro is not.

[enough]

13. NHK World TV just said this will hurt Japanese exporters and the economy in general. (nt)

http://www.ustream.tv/channel/nhk-world-tv

Apparently they will be discussing the economic effects.