The Financial Times has a story on the recent depreciation of the Japanese yen. Here’s the intro:
The yen dropped to a seven-year low on Monday as the Bank of Japan bucked the global trend for tighter monetary policy, stoking speculation that the central bank could intervene to prop up the currency for the first time since 1998.
The currency dropped more than 2 per cent against the dollar to reach ¥125, prompting traders to forecast further drops. It has fallen more than 7 per cent against the dollar so far this month, making this the worst month for the Japanese currency since 2016.
And how did that “propping up” in 1998 work out for Japan?
After reading this I figuratively smacked my lips in anticipation of what would come next. I thought, “I can’t wait until they describe the negative affects of yen depreciation, the reasons why the BOJ might feel the need to prop up their currency. This will make a great blog post.”
Alas, the explanation never came. Hence this crappy blog post.
The FT is a very high quality newspaper. High quality newspapers do not publish incomplete stories. When they say a government is considering doing X, they also explain why the government might feel a need to do X. Why might the BOJ be worried about yen depreciation? Inquiring minds wish to know.
Of course you and I both know that there is absolutely no reason at all for the BOJ to be worried about yen depreciation. But I wanted them to at least offer some sort of pathetic explanation, so that I could mock it. No such luck.
Instead, the article ends with a paragraph explaining why yen depreciation would actually be good for Japan:
Kuroda repeated on Friday last week his assertion that the weak yen was still “generally positive” for the Japanese economy, with the yen’s tumble boosting the shares of Japanese exporters.
Left unchecked, yen depreciation would boost Japanese exports and also boost Japanese inflation up a bit closer to their 2% target. Someone must do something to stop this from happening!