Quote:
Originally Posted by TinyRedLeaf
It's a bit of both. The yen has grown stronger against the US dollar, even as the US dollar has weakened against many major currencies including the yen. The US dollar has collapsed in the wake of the country's growing debt problems. Meanwhile, traders have been buying up the yen because they regard it as a reliable store of value.
Paradoxical, given Japan's national debt, which is twice the size of its GDP? Perhaps so. The key difference is that Japan's debt is backed up by its tremendous savings, so the shortfall is not regarded as unsustainable. Not yet, anyway. It's only a matter of time before it becomes toxic, so it's right for the national government to take action. To be sure, Japan will require far more fiscal measures than monetary action to tackle its 20-year malaise.
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It is more of perspective. The Japanese had always been very confident of their currency that their traders are not willing to let go. It creates a buy and hold, and subsequently when the rest of the world has been shedding the USD, the tanking of th JPY is seen as a sign of "stability", thus creating the buyout.
A graph doesn't show as much as a biyearly or quarterly bar chart, given how the immense psychological backing currency speculation has.