EspritdeKzhrot’s diary

Pick up the interesting topics of naval security from the U.S. Department of Defense and U.S. Navy trend reports and so on. Also, I will make a note and follow on my ideas.

Whitch is better "weak" or "strong" yen for Japanese economy?

It seems that the trade balance between US/Japan  is in the positive for the first time in a while.
Is that because of the "weak" or "strong" yen?

Or is it a different issue from the exchange rate?

When I hear "weak yen," it seems as if Japan's value has declined, and although I personally am happy to see a strong yen, I wonder what is going on.


In the 1980s, I had the opportunity to spend time at a heavy industrial company's plant in the Rust Belt region of the central United States, and it was during this time that I experienced a yen exchange rate of about 250 yen to the dollar.

At that time, although my income was not so high and I could not too afford to live on it, I was not particularly very rich even in Japan, so even though a Mac and soda cost about 50 cents and fuel was about a dollar a gallon, it was not too hard for my family of three to live like that, partly because of our youth.

I also got a real feel for the life of the white blue-collar class, which is considered a strong Trump supporter.


During the 1990s, when I had the opportunity to spend time at an electronics-related business in the eastside USA, the dollar was sometimes in the low ¥80s.

A dozen doughnuts and a gallon of gasoline at $1.99 were too cheap, but in general, shopping was so cheap that perhaps the strong yen had gone too far.

Housing and rent a car fee per month was around $10,000 felt not too high and a $20,000-$30,000 U.S. car was looks reasonable and seemed to be enough for basic life.

By that time, the people I came into contact with in my life had a certain level of education and status.


In the 2010s, I had more opportunities to work in Washington, D.C.

I don't quite remember how much the yen exchange rate was, it was probably the common sense exchange rate that we have seen to this day.
Hotel accommodations for business were about $600, or even $2,000 for a few days, or so I thought, but a small lunch out for $30-50, excluding tip, seemed expensive, but I was not sure if housing prices around Alexandria were too expensive or not.

 (the actual figure was high).


I spent about half of my time not visiting the U.S. working with U.S. counterparts, but the prices I deal with at work are simply quantified and far removed from my life, so what metric should I use to compare or feel? 

Well, at this time, the Japanese economy is becoming more about non-manufacturing than manufacturing, and the immediate effect on the economy is an increase in inbound business, which is favored by the weak yen.

On the other hand, outbound is not growing because "you can't shop abroad" because of the "weak yen"?

 

Trading companies, whose main business in the past was trading, would favor a strong yen if they were in the business of making profits by selling imported goods domestically, but would welcome a weak yen if they wanted to keep overseas sales prices low, as was the case in the auto industry in the past.


However, these days, trading companies are almost like investment companies, and not only trading companies, but also the Japanese economy is now in a situation where the balance of profit and loss is like a return on investment.

 

Even if profits are to be made through trade, a weaker yen is more welcome if the success fees and consulting fees for sales are higher than the profits from imports due to the strong yen.

 

It may come down to the simple fact that those who make money regardless of the yen's depreciation and those who lose money lose money, but I am not satisfied with the situation.

 

When I bought my hobby car it was during a period of pound and euro weakness, so I feel like I've gained terribly now. I will not actually sell it, though, so I can only grin at the unrealized gains alone.

 


At any rate, I would like to shop in a strong yen environment again. I felt it was very expensive when I went to the U.S. recently.

 

go on