The yen soared， briefly reaching the 142 yen range Ishiba Shigeru appointed as new president of the Liberal Democratic Party Nikkei average futures plummeted by more than 2，000 yen．
On the 27th, the yen surged against the dollar on the Tokyo foreign exchange market, briefly reaching the high 142 yen range per dollar. In the LDP presidential election held on the same day, Shigeru Ishiba was elected as the new president. The market had already been selling yen and buying dollars in anticipation of a victory for Sanae Takaichi, who had called for a halt to the Bank of Japan’s interest rate hikes, so Ishihara’s victory led to a reversal in the trend and buying of the yen. Nikkei average futures also fell sharply by more than 2,000 yen in overnight trading. Just before Ishiba’s election was decided, the yen was trading at around 146 yen to the dollar, meaning that the yen had appreciated by more than 3 yen against the dollar. Ishihara had indicated that he was concerned about rising prices due to the weak yen, and the view that the Bank of Japan’s monetary normalization policy would be maintained also encouraged yen buying. Hiroshi Suzuki, chief currency strategist at Sumitomo Mitsui Banking Corporation, points out that “in the short term, the yen may strengthen and the dollar may weaken to a level exceeding 140 yen to the dollar.” With the release of economic indicators that attract a lot of market attention, such as U.S. employment statistics, scheduled for next week, many are pointing out that market attention may shift again from Japan’s political situation to U.S. economic trends. Stocks reacted with a decline. Nikkei Stock Average futures fell sharply during night trading on the Osaka Exchange on the evening of the 27th, with the December contract trading at around 37,700 yen, down more than 2,000 yen from the settlement price on the 27th (39,850 yen). The rise in the yen’s exchange rate against the dollar led to increased selling of Japanese stocks, many of which are made up of export companies. In the domestic bond market, yields are rising (and bond prices are falling) on the view that Ishiba’s appointment as Governor will make it easier for the Bank of Japan to continue raising interest rates. The newly issued 10-year government bond, an indicator of long-term interest rates, rose sharply to 0.855% from 0.805% before the results were announced. The two-year note, which is more sensitive to monetary policy outlook, rose to 0.37% from 0.315%. Nikkei Previous thread The yen surged, briefly reaching the 142 yen range. Shigeru Ishiba becomes the new president of the Liberal Democratic Party. Nikkei average futures plummet by over 2,000 yen. ★4 [Dodon★].
>>1 The market is probably seeing the opposition party’s failed policy of raising taxes due to a strong yen. During the Democratic Party’s administration, investors withdrew capital, companies’ performance worsened, and the people who worked there suffered pay cuts or were fired, and the public was punished.
I’m fine with the days when McDonald’s hamburgers are 100 yen. Nowadays, there are craft burgers, so the division of labor is sufficient. Food is essential for human survival, so it’s better to have more choices.
The Dow is up over +1%, but the Nikkei futures are down 4.47%, so it’s hell. Monday will be a Black Monday. If it goes over -3000 yen, then the Ishiba administration is seriously finished. It will definitely suffer a major defeat in the general election.
>>13 Foreign investors have been selling for five weeks in a row, so funds are shifting to selling in Japan and buying in the US. If there is no capital, it will continue to fall without a rebound.
>>13 It’s probably due to the exchange rate. I don’t think it’s a problem if the yen is strong and stocks are weak. It would be bad if the yen weakened and stocks fell.
>>20 It’s probably because they expected that deflation would worsen if deregulation were stopped and interest rates and taxes were raised. Prices that have risen will not fall, but salaries that were supposed to rise from now on will not rise.
>>20 Takaichi said that raising interest rates is stupid, but Gel doesn’t deny it. If the Bank of Japan raises interest rates, it will affect the yen’s appreciation.
Dow Jones Industrial Average…up 430 dollars (highest daily reading) Nikkei 225 futures…down 1,830 yen This destructive power… If the Dow had fallen, it would have fallen 3,000 yen…
No matter what anyone says, in the end a weak yen will just make imported goods ridiculously expensive and make the whole thing pointless. Japan is not a resource-rich country that can meet all its needs domestically. A strong yen would be the best way to catch up with the rest of the world in terms of real wages. Profits from big corporations? That could be rendered powerless in an instant if Trump becomes president lol.
>>36 Companies that thought the main factor in the cost push was the exchange rate are basically losing out. Companies that were only hoping for exchange rate profits are companies that don’t want to realize that there is a problem with the supply chain structure. Price transfer is a big call, but buyers still don’t keep up, and Japan is the only country that thinks this is “saving” or “frugality.” I think the result of today’s presidential election is that we have continued to refuse to become a country where the nation pays the costs that are naturally incurred for the past 30 years.
The yen has risen even though not a single yen of gel has been spent, much more than the Bank of Japan’s currency intervention. It’s incredibly destructive.
Apparently the trigger was the Chinese Communist Party selling off $700 billion in US government bonds. However, the narrowing of the interest rate gap between the US and Japan was bound to happen at some point. It was an adjustment that was bound to happen. From the perspective of Japan, it just so happens that the presidential election was also involved, so people are mistaken in thinking that this is the root cause.
The numbers now will vary slightly depending on who is the victim, but the numbers a month from now will be the same no matter who is the victim. Learn your lesson already.
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