Strong yen puts strain on American shoppers in Japan

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Strong yen puts strain on American shoppers in Japan
By Erik Slavin, Stars and Stripes
Pacific edition, Thursday, December 3, 2009

YOKOSUKA NAVAL BASE, Japan — As servicemembers purchase off-base holiday gifts at the worst exchange rates in 14 years, Japan’s government took a step to rein in its strong currency Tuesday.

However, whether the Bank of Japan’s action was enough to weaken the yen against the dollar will ultimately be decided by the market. The early results aren’t especially promising.

In an emergency meeting Tuesday, the Bank of Japan said it would offer 10 trillion yen (about $115.8 billion) in short-term loans to commercial banks, according to The Associated Press.

Currency traders seemed unimpressed by the emergency meeting, selling just enough yen to drop the rate from 86.11 yen per dollar Tuesday morning to an ask price of 86.97 yen by 5 p.m. that afternoon. Since April the yen has gained 14 percent against the dollar and has spiked in the past few weeks.

“The weak dollar trend stems from structural problems, therefore the current situation of the mid-80-yen levels will continue for a while,” said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo, in an interview with Stars and Stripes.


Rest of article at: http://www.stripes.com/article.asp?section=104&article=66409