Forex Currency Trading

Currency Exchange – Forex Mamma

The Yen Drops as Japan Talks Intervention

December 3, 2009 – As the rest of the world’s concerns about the economy and dropping currency prices continues, Japan is facing a much different issue.

Earlier in the week Japan’s Yen reached 84.80 to the US Dollar-the highest it has been in 15 years. In theory this is great-a strong currency is the goal of every country and a triumph for investors with money in the Yen. However, the Japanese currency has appreciated to such heights that its exports are being threatened, as other countries can no longer afford to buy Japanese products with the new, high exchange rate. This could result in a big blow for the Japanese economy.

The recent situation in Dubai resulted in an additional push that sent the Yen to it’s high at the beginning of the week. However, Japanese Prime Minister Yukio Hatoyama made statements against the Yen’s high levels and the government and Bank of Japan have discussed an intervention. A stimulus spending package could help to lower the Yen back down to reasonable levels and save Japanese exports.

After Prime Minister Hatoyama made his statement and word got out about a possible intervention the value of the Yen already began dropping. Forex investors are getting out before actions are taken to reduce the cost of the Yen. In terms of what will happen with the future of the Yen, we’ll have to wait until next week to find anything out for sure.