Japan on RMB Depreciation

China is feeling lots of hostility, earlier this week when the U.S. was warning them about their undercover agents working in the U.S. to “persuade” fugitives to return to China for prosecution among other things the U.S. aren’t happy with, and China brushed that warning off with, “are you joking?”

Japan’s finance minister is now warning China about depreciating their currency that are likely to harm Japanese business.  According to the article that I’m copying and pasting from the L.A. Times, Japan’s stocks aren’t that great and the value of the yen continues to fall against the U.S. dollar.  The Japanese economy isn’t doing that great.

Japan’s finance minister warns China on currency moves

By ASSOCIATED PRESS

Japan’s finance minister, Taro Aso, said Friday that recent moves by China to allow its currency to depreciate are a concern and could pose problems for Tokyo.

The Japanese share benchmark, the Nikkei 225 index, fell 3% to 19,435.83 on Friday, slipping below the psychological benchmark of 20,000 on selling of shares in many sectors.

“Chinese factors are a big part of this, without a doubt,” Aso told reporters during a regular news briefing early in the day.

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Further devaluation of the Chinese yuan could put Japan in a “tough spot,” the Nikkei newspaper and other local media quoted Aso as saying.

It was unclear what sorts of choices Aso was implying Japan might make, but the Japanese currency, the yen, has fallen by over 60% against the U.S. dollar since hitting a peak of 75.35 yen to the dollar in October 2011. It was trading near 123 yen per dollar on Friday.

The yen’s depreciation was hastened by massive monetary easing since 2013 by the Bank of Japan, which is buying trillions of yen in assets each month, seeking to spur growth.

The injection of massive amounts of cash into the economy drove the value of the yen lower, while in turn boosting profits of major corporations that earn a large share of their revenue overseas — and pushing share prices higher.

The strategy is the backbone of Prime Minister Shinzo Abe’s effort to staunch deflation, or falling prices due to weak demand, and spur growth by persuading consumers and companies to spend more.

Stocks fall worldwide amid fears over China’s growth and U.S. interest rates
Stocks fall worldwide amid fears over China’s growth and U.S. interest rates
The Chinese currency’s decline against the U.S. dollar has had a limited direct impact on the value of the yen. But uncertainty over future policy and over the impact of China’s economic slowdown is reverberating across global markets.

“It’s not just China. It’s the emerging markets in general,” said Masamichi Adachi of JPMorgan in Tokyo.

“At the end of the day, it’s all coming from China. Brazil, South Africa, many countries are commodity exporters and the final destination is all going to China.”

http://www.latimes.com/world/asia/la-fg-japan-warns-china-on-currency-20150821-story.html

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Leanne

I began writing Elle's Adventure in China (EACh) in June 2014 as a fun summer project, but as obstacles kept interfering with my plans, I forked and forked more options. I took writing this novel much more seriously in mid-July, and want to have it officially published someday in my lifetime. As many artists put their hearts into their projects, so do I. I did not start out liking to read, but a professor suggested a book for me for homework a few years ago, and it was an amazing book. Since then, I read for pleasure, and I hope my novel, Elle's Adventure in China, does the same for as many of you as possible. The same thing goes to writing. I did not like to write until I took a course where the professor and papers made me love to write. I hope every one of you find what makes you happy and dedicated to work. In May 2015, I started my other blog, Read and Write Here (R&WH), as a place to post other things that aren't China- and Chinese culture-related and not EACh. I share some of my memories and experiences from student teaching, irregular participation in Daily Prompts, etc. I'd like to have regular people and bloggers to write book reviews and post it on R&WH someday. Keep reading and writing!

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