SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : Derivatives: Darth Vader's Revenge
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Sam who wrote (809)2/17/1999 8:55:00 AM
From: Henry Volquardsen  Read Replies (2) of 2794
 
Sam

Those numbers in the Barron's are foreign central bank reserves. So the changes that show up would be more of an indication of intervention and currency preference. The Bank of Japan is not going to run down it's reserves and would not be involved in repatriating capital.

It also would be counterproductive for the Bank of Japan to sell their dollars. Recently they have been injecting liquidity into the system, creating yen. If they sold their dollars they would be taking yen back out if the system, counter productive.

The repatriation issue is largely and issue of whether the Japanese private sector takes their capital back home. This is where much of the dollar selling has come from this year. This wouldn't necessarily show up in the reserve figures. However there is one interesting possibility. The BoJ might decide to buy the dollars the private sector is selling. This would have a couple of positive effects. First, by buying dollars they would be selling yen and thereby adding domestic liquidity. Second, buying dollars would keep the yen from strengthening to much. While not saying so publicly the Japanese realize that to strong a yen would hurt trade competitiveness and make recovery more difficult.

Henry
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News