NewsCase StudiesEvents

Yen No Longer A Safe Haven

Also in the news...

Ghana: UK Science and Innovation Network summary

A summary from UK Science and Innovation Network (SIN) on science and innovation in Ghana including UK SIN priorities and successes.

How to Build a Rewarding Work Environment That Employees Love

In today’s workplace, building a rewarding environment where employees feel valued and motivated is crucial for business success. Employees who love where they work are more engaged, productive, and loyal, which leads to better overall performance for the company.

Why UK Businesses Expanding Abroad Need Conveyancing Solicitors

As UK businesses increasingly look to expand their operations overseas, the importance of having the right legal support cannot be overstated. One of the key areas where businesses face significant challenges is in navigating foreign property transactions.

Navigating Crypto Regulations: What Investors Need To Know

Cryptocurrencies have shifted from niche investments to mainstream financial assets, attracting retail and institutional investors. With this rise in popularity, the regulatory landscape has become increasingly complex, presenting new challenges for those looking to invest. Understanding these regulations is vital for navigating the crypto market confidently.

Sweden: UK Science and Innovation Network

A summary from UK Science and Innovation Network (SIN) on science and innovation in Sweden including UK SIN priorities and successes.

Yen No Longer A Safe Haven

Back to News

Traditionally the yen has been a safe haven for investors in times of economic hardship, but it fell to a three-month low of Y97.80 at the end of February as global markets continued to fall, prompting speculation that the currencys days as a safe haven were numbered.

DAN WALSH on why Japan is no longer the small business retreat it once was.

With exports plunging 45% in Januaryfrom the year before, industrial production slipping 10%, public debtspiralling out of control and a record trade deficit, Japan is amongthe hardest hit by the global downturn.

The extent of the problems faced byJapans exporters is best exemplified by sales at its car makers.Global production has fallen 54 per cent at Mitsubishi, 54 per centat Nissan, 39 per cent at Toyota, and 33 per cent at Honda.

The ferocity of the slowdown in Japanhas forced many large companies, including Sony and Pioneer, to cuttheir workforce by thousands, heightening the risk that the countrysbiggest recession since World War 2 will deepen further.

The relative strength of the yen which has exacerbated weak overseas demand by making them relativelymore expensive on world markets is a heavy burden on the Japaneseeconomy.

Traditionally the yen has been a safehaven for investors in times of economic hardship, but it fell to athree-month low of Y97.80 at the end of February as global marketscontinued to fall, prompting speculation that the currencys daysas a safe haven were numbered.

Yet, it was a month ago that a formerJapanese finance minster told a British newspaper that he expectedthe ministry to take steps to artificially devalue the yen. It seemsas though the speed of unfolding crisis has taken everybody bysurprise.

This, however, does not mean an end tothe countrys economic worries; the global downturn will continueto blunt overseas demand for Japanese goods.

Japans troubles are not confined tothe economic sphere, after almost half a century of continuous powerthe Liberal Democratic Party is losing ground to the DemocraticParty, and is expected to be defeated in September. This turnaroundof popularity has surely been aided by images of the finance minster,Shoichi Nagagawa, appearing drunk at the G7 summit in Rome lastmonth.

You are not logged in!

Please login or register to ask our experts a question.

Login now or register.