To: Chispas who wrote (452 ) 2/22/2004 11:36:06 PM From: mishedlo Respond to Japanese held hostage by U.S. buyers yomiuri.co.jp The big losers will be European companies, German ones in particular, because Japan's determination stands in sharp contrast to Europe's' policy disarray, political infighting and central bank inaction. The result--yen depreciation against the euro--will haunt German and European capital and consumer goods makers for years to come. It goes far beyond the short-term windfall profits for Japanese exports to Europe and operations there. It allows Japanese companies to gain market share and build deeper relationships and brand loyalty where it really counts--Asia in general, China in particular; and when it counts--it is now or never that China's demand pull is accelerating, now or never that China's emerging middle class is carving out its brand and product preference. Here Japan's aggressive foreign exchange policy stance helps out much more than commonly appreciated, particularly by European politicians focused on domestic infighting rather than global strategic policy planning. Put another way, Japan and China cannot stop buying U.S. debt, because doing so would cause a U.S. recession that in turn would quickly force a sharp rise in Chinese and Japanese unemployment. Unless there is another buyer, the vendor remains hostage to its buyer.
