Driving the Chinese money higher
Japanese policymakers are in a in a drive to make their Yen into all time high.There is a confusion whether by increasing the yen will revive the economy of China or not.Wednesday saw a fall of 1% in the ten year bonds of Japanese for the first time in seven years.
Yen at present is trading at 86 to US dollar and a striking distance of 79.5 which was same as 1995.Yen surge is the Chinese accumulation of Japanese asserts feel economists.The year first five months saw China taking 1.3 trillion yen ($15 billion)in the Japanese asserts.The amount is 23% of the portfolio which inflows into Japan for the present year.
The stage at present is where the sovereign problems ,US recovery, Euro depreciating, purchase of Japanese asserts is prudent.Yen is strong which is trying to boost the inflation expectations and support the exports of Japan.At present there is no need for official intervention for the elevated levels of yen.The matter of exchange rate movements seems to be keeping the minds of bank officials of japan cool.