One-Way Yen Trade Won't Continue
The early statements out of the G7 last week contained lots of talk about currency manipulation. The yen initially took off when it was believed that the big industrial nations would not tolerate policies leading to any sort of competitive devaluation scenario. But the rally proved to be short-lived after a "clarification" seemingly aimed at giving Japan a pass on its weak yen policy. The way it sounded, the Abe administration has basically been accorded a green light to pursue further yen weakness.
Curiously, the pronouncement appears to conflict with statements made back on Feb. 8 by Japan Finance Minister Taro Aso, who said that the yen had weakened more than intended. The comment may have been a signal at the time to halt to any further yen sales by the country's large life insurers. The connection between Japan's Finance Ministry and the investment policies of Japan's large financial institutions are well known....460 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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