Hi Barry,
I don't understand how Japan will (apparently) be exporting more to countries whose currencies have collapsed while the same degree of devaluation has not happened to the YEN.
The local currencies in Korea, Thailand, Malaysia and the Philippines have declined by about half from their pre-July 1997 values against the U.S. dollar, while Indonesia's rupiah has devalued by about three-quarters, it said. SNIP ''The Asian crisis will likely drive price-competitive exports from Japan, rather than cause a flood of low-cost imports from the Asian countries themselves,'' Fosler said. ''The benefits to the Japanese business sector at a time when the Japanese trade surplus is running at $100 billion is an important reason for expecting the yen to strengthen.''
Further, I have thought that the YEN would weaken unless the Japaneese got their banking and monitary policy in order...this person seems to think the YEN will rise...How does that square with Japan exporting more to depressed economies whose currencies have collapsed?
Fosler forecast the yen will continue to move toward 110 per dollar as 1998 progresses, reducing some, but not all, of Japan's cost advantage. On Wednesday morning, dollar/yen stood just above 130.
What am I missing...Can someone help me out?
Steve |
