I am interested in getting (argumented) opinions about the future evolution of the Yen compared to the Dollar on one side, and to the Euro on the other side.

The JPY is low, due (partly at least) to carry trade operations taking place due to the area low interest rate.
At the same time, is has always been linked to the dollar.

It is therefore interesting to think about what will happen when the USD gets worse...
Will the JPY go up because of carry trade operations unwinding ?
or will if fall following the dollar ?
:shrug:

wpoplar

The Economist has called the yen the world's most undervalued currency, but I dont see why because Japan's national debt is the highest in the industrialized world...relative to GDP (160%).

If it was a european nation Japan would not even qualify for membership in the EU, as its national debt would have to be less than 60% of GDP.

I agree about Japanese debt, but what about the movements I suggested?
When the dollar falls again more, what will the JPY do vs EUR?
:confused:

Thank you.

wpoplar

I agree about Japanese debt, but what about the movements I suggested?
When the dollar falls again more, what will the JPY do vs EUR?
The Euro will probably rise against the Yen.

Because the Euro continues to become the reserve currency of choice as more dollars are sold off.

Thank you Carcano.:)
That confirms what I think that the flow away from the dollar with be superior to carry trade unwinding from the US zone.

Any other opinion ?

wpoplar

You know if it wasnt for the carry trade the Japanese government would likely be keeping the yen low anyway to protect their industries against imports. Just as the Chinese government deliberately keeps the Yuan undervalued.

In 2003 they converted 17 trillion yen to other assets for precisely that purpose.

In 2003 they converted 17 trillion yen to other assets for precisely that purpose.

Didn't know that.
It seems that the Yen is now gaining value against most currencies.
People fleeing from USD?