Currency Adjustments

Here we go again

The Japanese yen is in free fall, touching ¥144:US$1 in early September for the first time since the Asian Financial Crisis of 1997-98. The unit has lost 20% since January, shedding ground on a month-to-month basis in 18 of the past 21 months. It is down 28% from its recent, January 2021, peak of ¥104:US$1. The speed bumps may only kick in at 150 or 160 yen to the dollar, values last see in 1990 and 1986, respectively.

The adjustment is not all one-way. The dollar is also rising, at recently hit a 37-year high against the British pound. The euro is at parity with the dollar, which last occurred in 2002.

Japan is experiencing just 3% inflation, all of it supply-shock driven; wages are not moving. By contrast, most of Europe is experiencing economic conditions much like those in the US: high inflation and rapid pay increases.

Cue right-wing outrage at how badly this is hurting exports, and utter silence as to the impact on import prices.