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Strategies & Market Trends : Asia Forum
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To: Zeev Hed who wrote (7060)10/11/1998 6:01:00 PM
From: Joseph Beltran  Read Replies (1) of 9980
 
Zeev,

I tend to agree with you regarding the near future prospects for the yen. In my opinion nothing fundamental has changed vis a vis Japan. They still have done nothing to resolve their problems in the banking sector, much less the lack of domestic demand. As far as I can tell the current "strength" in the yen is totally related to the operation of hedge funds and perhaps the temporary repatriation of capital into Japan by banks selling U.S. bonds. (At least they picked the appropriate time to sell). The situation will reverse and the yen will go back up to 130-135/dollar.
I am beginning to wonder -after over one year since the inception of this "crisis"- whether korea, thailand, indonesia and others would have been better off just defaulting on their loans. The principal which they owe has not changed. They have been borrowing just to repay a portion of the interest owed. And they have done so at the expense of massive social upheaval and human misery. Had these countries defaulted it would have caused Japan to officially acknowledge and tackle their bad loan problems earlier rather than later. The debtor nations would have been placed on a debt moratorium. As far as I can tell, that is EXACTLY what has occurred to them anyway.

regards
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