By James McKee
The JPY and the Japanese stock market have seen substantial gains as the United States reports job growth in some sectors. Japan and many other Asian countries depend on the purchasing power of US citizens when it comes to their exports. What is good for the United States is good for Japan, and the JPY, well…sort of. The Japanese Yen has experienced inflation on a grand scale for over a decade now and despite numerous attempts to slow down or reverse the trend efforts have been un-successful. As a result Japan has seen massive unemployment and other issues as it lost market share to China and other countries.
As of late the Japanese stock market and JPY have seen gains due to improving US employment data. There has been some job growth in the United States as of late and with the recent movement towards manufacturing sector growth this trend should continue. The only possible downside of US manufacturing sector growth is possible competition for its products. For a long time now Japan has enjoyed a measure of dominance over US markets when it comes to automobiles and electronics, a changing market could signal an end of such dominance.
Japanese products have gone from a rocky start to a place in American culture that is trusted and aligned with quality. If US manufacturers do enter these markets and begin making products for domestic consumption Japanese manufacturers will have some competition and have to produce better products. In the end the consumer wins but the end result for the respective economies of both these nations could be undesirable. The JPY gathering much more value would dilute the country’s appeal as an exporter because its goods would become much more expensive. Although if Japan’s exports become un-marketable than the JPY could see a serious drop in value over time anyway, those on the forex currency exchange should keep an eye on Japan’s export relationship with the US.
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly.
