Japan economics thread.

coolgod

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Japan Stayed Out of FX Market in October Despite Yen Around 150​

Still, traders are keeping a close eye on the 150 yen to the dollar threshold as the government last stepped into the market to strengthen the yen at around that level. The ministry spent a record of about nine trillion yen last fall to prop up the yen, following the currency’s plunge to a multi-decade low.


Looking ahead, the yen’s weakness is seen to persist after the BOJ
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expectations that it may take a stronger step in raising its de facto ceiling on 10-year yields. While it increased yield curve control flexibility Tuesday, the yen weakened following the decision, falling past the 150 to the dollar level again.

USD/Yen broke past 150 today.
 

Phead128

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In the new IMF world economic outlook, Japanese 2023 GDP is estimated at 4.2 trillion USD compared to Germany's 4.4 trillion, and Japan is going to fall behind further in coming years.


This is due to the collapsing Yen of course, not the strength of the collapsing German economy. Nevertheless, people care about official rankings by nominal GDP and we can now call Japan the fourth largest economy in the world , only narrowly ahead of India at 3.7 trillion. India is scheduled to overtake Japan in 2026. The Indian rupee has actually appreciated by more than 11% against the Yen this year.

For a country that's not enjoying a large trade surplus anymore, a weak currency means becoming poorer. It's the Argentina model of economic development
What so special about GDP nominal if the changing of currency rates (controlled indirectly by govt actions) can change the rankings so drastically? Seems so arbitrary that China can be 30-40% larger in nominal GDP if it changes it currency to it's real valuation overnight.
 

Biscuits

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What so special about GDP nominal if the changing of currency rates (controlled indirectly by govt actions) can change the rankings so drastically? Seems so arbitrary that China can be 30-40% larger in nominal GDP if it changes it currency to it's real valuation overnight.
Well yeah, the measure you get from nominal isn't something you can compare, unless 2 areas use the same currency.

For example you can compare the gdp of Tokyo and Osaka by nominal, but you can't compare the gdp of Japan and China.
 

Minm

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What so special about GDP nominal if the changing of currency rates (controlled indirectly by govt actions) can change the rankings so drastically? Seems so arbitrary that China can be 30-40% larger in nominal GDP if it changes it currency to it's real valuation overnight.
It's not very meaningful if the country has strong domestic industry, but there is prestige in being higher in the ranking. However, nominal GDP and exchange rates matter a lot when most manufactured goods are imported. In the case of Japan it's mostly a sign of its decline that will be harder to hide. Politicians love to talk about how they're representing the number three economy in the world. Now they'll be out of the top 3. It will affect confidence and make more people realise how big the gap is between Japan and China. So they're less likely to challenge China
 

Biscuits

Major
Registered Member
It's not very meaningful if the country has strong domestic industry, but there is prestige in being higher in the ranking. However, nominal GDP and exchange rates matter a lot when most manufactured goods are imported. In the case of Japan it's mostly a sign of its decline that will be harder to hide. Politicians love to talk about how they're representing the number three economy in the world. Now they'll be out of the top 3. It will affect confidence and make more people realise how big the gap is between Japan and China. So they're less likely to challenge China
There is no prestige in it because with that measure, it can't be compared without first normalizing it.
 

AssassinsMace

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It's funny because Japan was all-in on betting on hydrogen cars where they bad-mouths EVs and even lobbied for the US to turn their backs on them. Now because they lost that bet, all of the sudden Japan's making huge claims on EV battery breakthrough technologies being superior to anyone else's. But if that were true, they would have made an easy transition to EVs and not be clinging onto dear life on ICEs for the survival of their auto industry. Of course some of their claims go as far back as a decade and still nothing to show for it. Now Japan is claiming to have the best chip making tech at lower cost than the best. Maybe they've been doing this and I haven't paid attention but I don't recall the Japanese making boastful claims like this where the chances of total embarrassment in the end are high. It's like Japan is becoming like India.
 

canonicalsadhu

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What a disaster Japanese leadership has become. Instead of easing inflation by taking advantage of Russia's cheaper energy offers and investing in Japan's ailing tech sector, Kishida's priorities are sanctioning Russia, funneling another $5B to Ukraine, and spending obscene amount of money to buy American military equipment to militarize Japan and pick a fight with China.
 
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