-->Guten Abend

Der grossse Verlust durch dem Dollarverfall sei mehr als aufgefangen durch die Profite aus der Bewirtschaftung der Reserven.



Foreign-exchange reserves hit record high
Figure laid to record 20.43 trillion yen spent on intervention in 2003

By HIROKO NAKATA
Staff writer

Japan's unprecedented spree of dollar-buying interventions pushed its foreign-exchange reserves to a record $741.25 billion as of the end of January.
The Finance Ministry said Friday the reserves, by far the biggest in the world, were up by $67.72 billion from a month earlier -- the steepest rise yet for a single month.

Japan's currency-market interventions in 2003 totaled 20.43 trillion yen, the largest for a single year, it said. The previous record was 7.64 trillion yen, set in 1999.

Tokyo wants a weak yen to protect its export-driven economic recovery.

Japan reportedly spent 7.15 trillion yen on yen-weakening market interventions in January alone, compared with 4.02 trillion yen for all of 2002.

Despite the massive intervention by Japanese financial authorities, the U.S. currency fell to 105.53 yen on Jan. 28 from 108.30 yen on Jan. 9.

The greenback slid by about 10 percent against the yen last year and dipped earlier this week to its lowest level in more than three years.

Japan's swelling reserves have economists worried, due to a latent loss caused by the dollar's persistent fall against the yen.

The Finance Ministry has countered such criticism, however, saying the latent loss has been more than offset by profits earned from managing the reserves.

The foreign-exchange reserves consist of securities and deposits denominated in foreign currencies, mostly in dollars, plus International Monetary Fund reserve positions, IMF special drawing rights and gold.


Intervention to go on
Finance Minister Sadakazu Tanigaki indicated Friday that Japan will tell its Group of Seven partners it will continue intervening in currency markets.
"As I have said before, it is desirable that foreign-exchange rates reflect the fundamentals of the economies involved in a stable manner," Tanigaki said before leaving for Boca Raton, Fla., where the G-7 financial leaders were to start their two-day meeting later Friday.

"We'll take firm action against moves that do not match this view," he said, indicating Japan will continue conducting yen-selling, dollar-buying intervention."We'll naturally stress this at the G-7 talks."

Officials and market watchers have said the weakening dollar and its impact on the global economy are expected to top the agenda at the G-7 meeting, Tanigaki's first.

The dollar's fall has driven the yen and euro sharply higher, with the U.S. currency currently moving around 105.50 yen, its lowest level in 40 months. Japan and European nations have voiced concern that further rises of the yen and euro would derail their export-driven recoveries.

Heizo Takenaka, state minister in charge of economic and fiscal policy, said separately he does not expect G-7 officials to discuss exchange rates of specific currencies, but to study ways to ensure sustained growth in the world economy.

Tanigaki said he wants to exchange views frankly on various economic issues with U.S. Treasury Secretary John Snow during a bilateral meeting on the sidelines of the G-7 talks.

"As G-7 meetings will be held occasionally in the future, I would like to develop personal ties with (Snow) as my counterpart," Tanigaki said.

Bank of Japan Gov. Toshihiko Fukui and Zembei Mizoguchi, vice finance minister for international affairs, will also attend the meeting.

The G-7 members are Britain, Canada, France, Germany, Italy, Japan and the United States.

The Japan Times: Feb. 7, 2004
(C) All rights reserved

<ul> ~ Foreign -exchange..</ul>

-->>The Finance Ministry has countered such criticism, however, saying the latent loss has been more than offset by profits earned from managing the reserves.

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-->EDITORIAL

The dollar's dangerous path

A stronger yen, or a weaker dollar, is a drag on Japan's export-led economic recovery. Trying to stem the tide, the government often steps into currency markets on a massive scale. Market players, however, worry that these dollar-buying, yen-selling interventions could be putting the Japanese and U.S. economies on a dangerous path: A falling dollar, should it continue, would open a Pandora's box on both sides, with dire implications for the world economy.
The theory goes something like this: America's"twin deficits" -- in the federal government budget and in the current-account international payments balance (mostly the trade deficit) -- continue to mushroom as President George W. Bush's administration pushes ahead with aggressive economic stimulus measures, such as huge tax cuts. As a result, investors and traders are coming around increasingly to the view that the greenback is in for a further fall.

The twin deficits are already ballooning to an all-time record: roughly $500 billion a year each. Add to this the low savings rate, or the small reserve of surplus domestic funds, and there emerges a precarious picture of the world's largest economy growing on the back of borrowed foreign money. A large-scale flight of capital may choke off growth.

For President Bush, who is seeking re-election in November, it is imperative to keep the U.S. economy moving forward. This makes it almost certain that the Bush administration will follow an expansionary fiscal and monetary policy. A weaker dollar seems to fit nicely into this policy because it helps expand U.S. exports while reducing the trade deficit. That explains why Washington, while talking of the"strong dollar," is winking at a weaker dollar.

In Europe, meanwhile, investors concerned about a sinking dollar are cutting back on their dollar assets -- a clear indication that they are beginning to have second thoughts about the U.S. currency. A case in point: Natural gas utilities in Russia and the European Union are moving to use the euro, not the dollar, to settle their transactions.

Japan's relations with the United States are complex. America's economic expansion is welcome, of course, because it creates more demand for Japanese products, thus adding to domestic growth. But a sharp rise in the value of the yen will deal a body blow to exporters and stunt economic expansion.

Dollar-buying operations, which involve the purchase of U.S. government bonds and securities, increase capital flows to the U.S. These funds are helping the Bush administration continue its expansionary economic policy. At the same time, however, this is reinforcing the market perception that the dollar may be on the way down.

For Japan, one result of the repeated dollar mop-up interventions is a sharp increase in the share of dollar assets in Tokyo's foreign-exchange reserves, which now exceed $600 billion. By contrast, China, an emerging economic power, has increased euro assets.

These dollar holdings will depreciate further if the currency weakens. Yet the government keeps propping up the dollar to prevent its precipitous fall. But the dollar's slide will persist as long as the twin deficits continue to bulge. If it drops below 100 yen per dollar, the nation's export-fueled growth will suffer. Manufacturers, now on the recovery track, may be able to hold on, but nonmanufacturers like builders and retailers -- who have been stuck in minus growth over the past several years -- would be hit harder. The protracted slump in service sectors is largely responsible for stubbornly high unemployment.

As for the U.S., a rapid fall of the dollar would drive up interest rates. Consumer spending and housing investment, both supported by tax cuts and low interest rates, are already showing symptoms of a bubble. Reality seems to call for a shifting of economic gears in favor of deficit reduction and currency stability. But the election-conscious Bush administration is set to pursue an expansionary course.

The question for Japan is whether the economy, still not quite out of the woods, will be able to absorb the impact of a rising yen. If the ascent is measured, it probably can be managed. But the scenario of a slow but steady recovery will go awry if the dollar goes into a tailspin.

The weakening dollar will be a major topic of discussion at February's Group of Seven meeting of finance ministers and central bankers. Japanese representatives should use the occasion to point out the dangers inherent in the twin U.S. deficits. Working in concert with European nations, Japan should also urge the U.S. to embrace an international effort to stabilize currency markets.

The Japan Times: Feb. 2, 2004


<ul> ~ The dollar...</ul>

-->Guten Abend Jükü


Kannst du mir helfen zu verstehen, wie man solche ungeheuren Summen absichert und dann gar noch gewinnbringend einsetzt.


gruss
zani

-->>>The Finance Ministry has countered such criticism, however, saying the latent loss has been more than offset by profits earned from managing the reserves.
>[img][/img]

-->>Guten Abend Jükü
>
>Kannst du mir helfen zu verstehen, wie man solche ungeheuren Summen absichert und dann gar noch gewinnbringend einsetzt.
>
>gruss
>zani

Der Dollar hat zum Yen in den letzten 6 Monaten 15 % verloren; die Dollarforderungen der BOJ müssten also, um das"auszugleichen" einen Zinssatz von 30 % p.a. gebracht haben.

Du meintest aber Absicherungen; Absicherungen wären Verkäufe auf Termin USD gegen Yen - die BOJ macht aber verzweifelt das Gegenteil. Beides gleichzeitig geht nicht.

-->Guten Tag JüKü

Danke auch für die Antwort.
Dazu noch einigen Anmerkungen.

>>Guten Abend Jükü
>>
>>Kannst du mir helfen zu verstehen, wie man solche ungeheuren Summen absichert und dann gar noch gewinnbringend einsetzt.
>>
>>gruss
>>zani


>Der Dollar hat zum Yen in den letzten 6 Monaten 15 % verloren; die Dollarforderungen der BOJ müssten also, um das"auszugleichen" einen Zinssatz von 30 % p.a. gebracht haben.

Bem:
ja

>Du meintest aber Absicherungen; Absicherungen wären Verkäufe auf Termin USD gegen Yen - die BOJ macht aber verzweifelt das Gegenteil. Beides gleichzeitig geht nicht.

Bem:
Eigentlich meine ich noch gar nichts, sondern habe nur die eine Frage:
Hat das jap. Finanzministerium nicht Instrumente zur Verfügung, die deren Behauptung (The Finance Ministry has countered such criticism, however, saying the latent loss has been more than offset by profits earned from managing the reserves) rechtfertigen.
Es wird ja viel gelogen. Aber würde das jap. Fachpublikum nicht konsterniert reagieren?

Gruss
zani

-->>Hat das jap. Finanzministerium nicht Instrumente zur Verfügung, die deren Behauptung (The Finance Ministry has countered such criticism, however, saying the latent loss has been more than offset by profits earned from managing the reserves) rechtfertigen.

Ich wüsste nicht, wie das gehen sollte. So eine Geldmaschine suchen alle ;-)

>Es wird ja viel gelogen. Aber würde das jap. Fachpublikum nicht konsterniert reagieren?
>Gruss
>zani

Tja, wie die Medien auf so manchen Mist reagieren, siehst du ja...
Wenn IFO-Sinn Un-Sinn von sich gibt, plappert die Presse es ja auch schön unkritisch nach.

Also, m. E. war das eine Behauptung ("offset by profits") nach dem Motto"versteht doch eh keiner und die Presse wird´s schon verbreiten".

Vielleicht liege ich aber auch falsch und die BOJ hat eine Geldmaschine erfunden ;-)

-->Nichts ist unmöööglich, und das auch ausserhalb des japanischen Automobilsektors. Wäre doch gelacht, wenn die Japaner die Zinskurve nicht genauso gut reiten könnten wie ihre grossen Vorbilder im Wilden Westen,

meint Ecki1