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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (1209)	1/29/1999 9:51:00 PM
From: Step1	Read Replies (1) \| Respond to of 3536

To all: Any guesses as to Yen-USD direction ? Often repeated everywhere, until Japan comes out of its slump (and slumber) Asia has no chance . Also heard , Japan's recession and potential worsening into a full blown depression (which I believe depending on the text book you use could be called that...) is the single most threatening unresolved problem to the direction of the world economy. So what does that say for the yen, since monetary policy and implied exchange rates with other major currencies is so important to the recovery? it seems the crowd of believers is split between two camps: 1- the yen will get stronger, say 100 to 110 in the near future. reasoning: interest rates in Japan have nowhere to go but up. The US has more to lose because of its market bubble and its bigger exposure to Latam. 2- The yen will get weaker, say 150 to 170 after March, once the repatriation of dollar asset slows down. reasoning: the economy is sick and in a deflationary spiral. the world economy is marching towards a hard landing and major hang-over once the American party goers take one last drink for the road and head home. This will in turn turn off the last overflow for Japan's products, making it harder at home. The only way out to rescue the banking system is to reinflate. While both theories (here overly simplified) seem to have merits on their own, there seems to be no middle ground. It 's black or white . Would any poster comment? Yours Sincerely, Stephan Gilbert