[TradersCom]

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[ClemSnide]

With all the fear and gloom about Japan and their inflation they seem to be doing just fine trade wise. 110 USDJPY seems a gift . What do the US trade reps have to say about that as NAFTA kicks off.

[Shane Cameron]

Japan with a strengthening currency managed to increase exports. I know it wasn’t (yen) crazy strengthening, but I’d like to understand why US exports require a weak dollar, but for other countries, it’s not necessarily the case.

[ThePitBoss]

[quote=”sdot54″ post=958]Japan with a strengthening currency managed to increase exports. I know it wasn’t (yen) crazy strengthening, but I’d like to understand why US exports require a weak dollar, but for other countries, it’s not necessarily the case.[/quote]

Much to do with efficiency – when the U.S. dollar was weak for all those years esp the last 7-8 there was nothing to do make export industries more efficient compare the GM bailout to German cars and Japanese cars for example.

We have become a massive service economy

[CautiousInvestor]

[color=blue][size=5]^^^^ +1 on excellent question and WELCOME to forums 🙂

I will try to answer also: WEAK DOLLAR improves buying power of other nation … It creates a K-Mart blue light special for trading partners. A strong $$$ gives other nation less buying power for needed goods & services.

For example, when EURO is at $1.07, you can buy more “widgets” with 10,000 EUROs …. than when EURO is at $1.14 … Fluctuation in carry trade currency is important to trade balances, volumes, and profitability. Nations may increase inventory under favorable trade conditions to beef up volumes

Hope this helps :)[/size][/color]

[CautiousInvestor]

And OIL is one of the REAL CURRENCIES of world … even though it’s seen as commodity … the value of it impacts everything — including currency carry trade

[ThePitBoss]

Oil at these levels and a stronger yen is great for Japan – imports were also down as a result. The point is I was making Germany and Japan adjusted in times of their high currencies America didn’t through bailouts, labor practices etc

You are also right a higher currency makes for cheaper imports and stronger purchasing power in saying all that Apple takes advantage manufacturing in China for example and effectively exporting back to America to make a squillion ..

[ThePitBoss]

The $USDJPY 50% midpoint of days trading range at 110.01 was breached again afer rumors of Cohn resignation and denial. Now trading 109.85 after 109.65

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