This Wharton prof should explain why the Japanese yen is still weak and not strong against $? There is inflation in Europe, which is why interest rates in UK and rest of Europe are high. So their currency has appreciated as it invites investors.
US is keeping interest rates low, because of low inflation. Absence of easy credit to american businesses due to weaker dollar is also forcing them to make discount loans to big banks. All this is helping the US economy which was struggling just a few years ago.
Guys in India think the US economists are dunce and the best brains are with desies only. Well, US has some of the best economists and they have economic policies to foresee and come out of every recession.
Japanese yen used to be at the exchange rate of 500 yens to 1 dollar before the Japan manufacturing boom. Now yen is trading in low hundreds. It is not weak.
RE:Japanese yen is also weak
by Loan Shark on Oct 04, 2007 06:38 AM Permalink
look at the 10 year chart on yen versus dollar and look at the recent chart of yen versus dollar and dollar versus Euro, GBP and CAD and you "may" understand what I am talking about.
Japan's growth was so strong in the 70s and 80s that they grew way too much. From 1989, Japan's growth is slow and in some years it is of recession. In relative terms Japan is growing slower than any other country. (In the last 15 years)
Yen hit a peak of 80 per dollar. But it had been as low as 600 per dollar before manufacturing boom.
Depends on which base level you compare, Yen is either strong or weak.
