Title: Why the Yen is Strong – Currency Thoughts
Headings: Why the Yen is Strong
Why the Yen is Strong
Content: Unattractive long-term bond yields: The 10-year JGB yield is currently 1.00% and has averaged 1.38% during the past ten years. A battered stock market: The Nikkei-225 closed today at 8,519, 78.1% below its record high of 38,916 at the end of 1989. That’s a six and three-quarters percent per annum rate of value destruction sustained over twenty-one and three-quarter years. Dismal demographic prospects: The population likely crested in 2010. A low birth rate and barriers to immigration point to accelerating drop in the future and an ageing population. A dysfunctional political landscape: There have been 19 different prime ministers since early 1981, more than the 14 Italian prime ministers and much more than the total number of U.S. presidents and British prime ministers (5 each) or the number of French presidents (4) and German Chancellors (4).