Today’s Bank of Japan (BOJ) intervention into the price of the Japanese yen versus the dollar now explains why Naoto Kan was kept on as president of the DPJ and will continue as Prime Minister of Japan: It was all a back-door deal. Wheeling and dealing as usual.
“Scratch my back and I’ll scratch yours.”
All this time Kan was reluctant to prop up the yen and then, suddenly, he wins the vote and the next day, his so-called “principles” are out the door and the BOJ jumps into yen intervention head-first for the first time in six-years (after it was proven it didn’t work the first time). Well, at least that explains why he was kept on.
My favorite economic blog in the world, Mish’s Global Economic Trend Analysis, has an excellent
analysis on the idiocy of the BOJ intervening in the price of the Japanese Yen versus the US dollar.
Mish cynically writes of the Bank of Japan (BOJ) intervention:
It has been proven time and time again that currency intervention does not work. Yet, somehow it is “good for the government to show its strong stance”. (Referring to foolish remarks by investment strategist Takao Hattori at Mitsubishi UFJ bank).
He also adds later in the same article:
If the Yen does drop in a sustained way, it will not be because of the intervention, but rather because the Yen had outrun fundamentals and was simply ready to drop.
Even though Japan had been complaining that a strong yen was hurting their exports, records show that Japan actually had strong exports in July 2010:
JOHN VAIL, CHIEF GLOBAL STRATEGIST, NIKKO ASSET MANAGEMENT
“Clearly the U.S. is not going to be too friendly towards it although they may not argue too much about it in that Japan is a big customer for its Treasury securities.”
“I’m not sure we are going to see a major weakening of the macro statistics in Japan, but if we do that would obviously help weaken the yen, but exports were quite strong in July both on a nominal and real basis so it’s a bit of a quandary for Japan.”
“But the biggest problem for Japan is not the U.S. cross rates, it’s the Korean won, and the Korean won has just been ridiculously weak. Yet G20 officials have yet to really pressure Korea on this at all, which I think is really to Japan’s detriment.”
I highly recommend reading Mish’s entire blog on the subject as he is a much better expert on this than I, but I want to point out something here that is missed by most people as to what happened to the price of gold, in yen, immediately after this market intervention. And how government intervention – any government intervention – distorts the marketplace and creates problems for investors and business men alike.
Today, Sept 15, 2010, the opening price per gram of gold was ¥3426 per gram. This was before the BOJ intervention in the price of the yen versus the dollar.
This price was realized after strong gold gains in New York overnight where gold closed at $1268.70 on Sept. 14, 2010. This created the gold price of ¥3426 a gram as stated in the previous paragraph. At that time the yen was trading at ¥82.27 per dollar.
Then, at about 10:30 am Tokyo time, the BOJ intervened and the price of the yen dropped from ¥82.27 per dollar to nearly ¥85 per dollar. This caused the Nikkei 225 to soar.
It also caused the price of gold to jump too.
In just a moment, the day’s price of gold went from ¥3426 a gram to ¥3461 a gram…
Now, most gold owners would celebrate at this information, but a closer look reveals that this is not all that great and that, even the supposed “experts” think that this intervention won’t matter as market fundaments are what’s driving the price of the yen.
As the NPR reported:
“The effect from Japan’s solo intervention won’t last very long. We have to see how the U.S. and European monetary authorities would react,” said Yuji Kameoka, chief forex strategist at Daiwa Institute.
The intervention came a day after Prime Minister Naoto Kan held onto power after fending off a challenge from veteran lawmaker Ichiro Ozawa for the ruling party presidency. Ozawa had advocated currency intervention, but Kan had until now been reluctant to act.
So now, one again, things make perfect sense. Ozawa was willing to intervene in supporting the yen. Kan wasn’t. Ozawa was a big money politician who had a dirty image; Kan wasn’t… Ozawa played the sneaky back-door smoke-filled room deals; Kan was supposedly a “new face” and not a part of the “Good Old Boys” ….
But that’s all gone now.
Kan and his people got the votes they wanted by promising to prop up the yen… It’s business as usual in Japan, folks.
The politicians in this country and even the Bank of Japan are not concerned about the well-being of the average Japanese person. They will do whatever they can to keep the Ponzi scheme going for as long as they can… The can has been kicked down the road once again….
A few months ago, Kan said he wouldn’t prop up the yen because he was worried that, due to debt, Japan would become like Greece… But, here we are.
Thank God that these politicians look out for number one… Thank God they will do whatever it takes to get elected….
The Japanese people be damned.
Keywords: gold, Ponzi, Ichiro Ozawa, Kan, Mish, Marketing Japan
Great News! Japan’s best airlines (no, it’s not Japan Airlines)… Japan’s best airlines, All Nippon Airways will launch a LCC (Low Cost Carrier).
Japan’s ANA to launch budget carrier
TOKYO — Japan’s All Nippon Airways (ANA) is to launch a low-cost carrier that will operate both international and domestic short-haul routes from the second half of 2011, the company said Thursday.
ANA said it had signed an agreement with Hong Kong-based private equity firm First Eastern Investment Group to establish “the first Japanese low-cost airline”, adding that it would operate independently from ANA.
The new company will be established by the end of this year, ANA said, with the aim of flying both international and domestic short-haul routes out of Kansai International Airport, Osaka by 2011.
“Regardless of the intense competition in the air transportation industry, we anticipate an increase in passenger traffic demand in East Asia,” said Shinichiro Ito, president and chief executive of ANA.
The carrier “came to the conclusion that a low cost carrier would be the right approach to compete effectively in this market” he said.
The airline said the new company will be 66.7 percent owned by Japanese investors, with ANA holding a 39 percent stake.
First Eastern will hold the remaining 33.3 percent stake, the maximum foreign ownership currently allowed in Japan.
I just got back from the 2011 Rugby World Cup Press Conference in Tokyo. It was pretty much a success. Since basically everyone else who was there was from old media (TV & print) I thought I had better use the Internet and my blogger advantage to tell you good folks what happened at the event at least a day before the antique media gets around to it…
I mean, what’s the point in inviting a blogger if they don’t blog immediately, right?
The event was held at Tepia Hall 4F. Tepia Hall is next to Chichibunomiya Rugby Stadium in Aoyama in Tokyo. The closet subway station is Gaienmae (exit 3). The event started at 2:30 pm and ended at 3:30 or so.
The guests included the New Zealand Ambassador to Japan, Ian Kennedy; Jason Hill the head of New Zealand Tourism; John Kirwan the most famous Kiwi rugby player in history and head coach of the Japanese national team, the Cherry Blossoms; and the Japan team current representative player, Fumiaki Tanaka.
John Kirwan, head coach of Japan’s National Rugby team gets award from children
The event started with a short speech by the ambassador to Japan, Ian Kennedy, followed by another speech and a list of data presented by Jason Hill. (Wow! New Zealand representatives can speak Japanese! The people the USA sends over never can!)
Some of the interesting points about the Rugby World Cup 2011 are:
* It is the world’s third largest sporting event (soccer is #1)
* This will be the 7th World Cup
* In 2015 the WC will be held in England; in 2019 in Japan
* There will be 48 matches in 45 days with 20 teams
* Opening match is Sept. 9 at Eden Park featuring New Zealand vs. Tonga
* 1.65 million tickets will be sold
* Plus New Zealand is safe and the most desirable place to visit on earth (I can attest to that!)
After Jason Hill gave his speech, the guest of honor appeared. John Kirwan took the stage to answer questions and give his take on the World Cup.
Since John Kirwan took over as coach of Japan Rugby, the Japanese Rugby team has improved by leaps and bounds. Japan used to be ranked #19 in the world, but with John Kirwan (JK as he is affectionately called) at the helm, they have shot up to #12 in rankings.
JK says that Japan must do well this World Cup in order to qualify for the 2015 World Cup in England and that is the goal for the Japan team and JK’s personal goal too.
John Kirwan answering reporter’s questions
Well, that and doing well against the All Blacks, New Zealand’s team who is hungry for a World Cup victory – and will be extremely tough to beat – especially since they are playing at home.
When I asked JK what his purpose was when the Japan team takes on the All Blacks in their second game at the World Cup, JK said that no matter what, that after the game is over, win or lose, the All Blacks must respect the Japan team…
He also said that if Japan can beat the All Blacks that he would be satisfied and retire right there on the spot. I reckon that would motivate his guys!
Good luck to John Kirwan, the Cherry Blossoms and well done to New Zealand and New Zealand Tourism for a very interesting and well done event!
Go Japan! Go New Zealand!
Keywords: John Kirwan, All Blacks, Mike Rogers, Rugby, 2011, 2011 Rugby World Cup, New Zealand, Fumiaki Tanaka, Cherry Blossoms, Mike in Tokyo Rogers, Marketing Japan
If you use Gmail – and who doesn’t these days? – you might have noticed a that, at the top right of your Gmail, there is a new item in bold red lettering that says “New Priority Inbox Beta“. This is a new Google Gmail feature that I think is just fantastic and it is definitely going to make our lives easier!
The people who make it in the new economy are the ones who can stay focused and stay organized. Everyone knows how difficult that can be! Just how do we stay on top of several email accounts that are constantly filling up and altering our work priorities by the minute? It is tough! I know, when I work at the GM of the broadcasting station, I was getting over 800 emails a day. There was no way to keep up with them all. I had to prioritize. You must do that too. (I have written some other tips for you here.)
Well, now here comes Google’s Gmail newest feature! The New Priority Inbox Beta promises to make live easier for all of us by presorting mail for us into higher and lower priority. I gather that it uses some sort of algorithm that judges mail by past actions; did you get mail from this person before? Did you answer it? Did you answer it soon, etc., etc?
Here’s a brief rundown of what New Priority Inbox Beta can do from the website:
Email is great… Unless there’s too much of it.
Wouldn’t it be nice if you knew which messages to read first?
Introducing Gmail Priority Inbox!
Priority Inbox finds the important messages and sorts them for you!
If you want to get back to a message later, just mark it with a star!
How does Priority Inbox work?
Gmail already has a great spam filter…
But what’s really neat… It’s really good at predicting what’s important!
Based on which e-mails you read and which emails you reply to.
And, if it makes a mistake….Just mark a message less important or more important.
Over time, it gets better and better!
So checking email will be much less daunting!
And here is a short cartoon explaining briefly about the features!
I can honestly admit that I started using New Priority Inbox Beta a few days ago and from the first time I used it, it helped me to spot an important mail that I had missed; and that mail came to me 12 days ago! Had I not tried New Priority Inbox Beta I would have missed that mail completely and lost money! I do not like losing money!
I whole-heartedly recommend New Priority Inbox Beta.
Keywords: Google, Gmail, New Priority Inbox, Mail,