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If you’ve ever wanted to visit Japan, now’s the time. The entire country is on sale!

netsharc 2y ago
Well, except with all this panic, the Yen is gaining against the USD, i.e. the "sale" is less good these last few days. Not sure why, maybe it's because people are dumping USD, and buying Yen as a safe-haven currency?
- deleted 2y ago
  [deleted]
- bryceneal 2y ago
  The consensus seems to be that the gain is caused by the Bank of Japan raising rates on July 31, hinting at more raises. Yen has had historically low near-zero rates, so this raise strengthened their dollar. On top of that, many traders were involved in a "Yen Carry Trade". Meaning they were borrowing Yen (because of the near-zero rates which beat out the 5% USD rates) and were using it to trade equities, crypto, whatever. When the Yen started gaining against the dollar, these traders were actually losing money (since they were short Yen due to their Yen-denominated debt). This caused an unwind, meaning the traders wanted to close their positions (sell their equities, crypto, whatever) and buy back Yen to repay their debt, which pushed the Yen up further.
  - worldvoyageur 2y ago
    That, plus the trade was highly leveraged, so when yen rates went up the traders were asked to provide more margin. To meet the extra margin required they needed to unwind at least some of their position.
  - arpinum 2y ago
    The exchange rate story doesn't sit well with me, wouldn't you simply hedge the fx risk?
- shusaku 2y ago
  My impression from these past few days has been that the US will also cut the rate soon, so you’ve got convergence from both directions.
nabla9 2y ago
The exact opposite is true. The sale was triggered partly because Japanese yen strengthened significantly. It's now more expensive to visit Japan.
- SapporoChris 2y ago
  Yes, yen is stronger versus the US dollar. However, the rates are still very good, especially when viewed over the past ten years. https://www.xe.com/currencycharts/?from=USD&to=JPY&view=10Y https://www.xe.com/currencycharts/?from=USD&to=JPY&view=10Y
  - satvikpendem 2y ago
    Yes, in fact I am in Sapporo right now, SapporoChris. I was earlier in Okinawa when the rates were still 160 yen to the dollar, but the current conversion is not bad either.
- acchow 2y ago
  Still much cheaper than 5 years ago
bottled_poe 2y ago
It’s so funny to me how confidently incorrect this comment is.
- nemo44x 2y ago
  It’s not entirely wrong even though there has been a 12% change the last month or so. The Yen is still historically cheap VS USD. Last time I was there you got like 110¥ for 1$. It’s around 140¥ today. But yeah, going there a few months ago would have been better.
  - adrian_b 2y ago
    When I was there in May, it was well over 150 yen per dollar. However, even with 140 yen per dollar the prices would be quite good.
- puzzlingcaptcha 2y ago
  Yen is still cheaper than at any point in the last year.
- xenospn 2y ago
  And yet you’ve somehow managed to create a reply that’s even worse.
IG_Semmelweiss 2y ago
Vs 3-9 months ago, incorrect. Vs anytime previous to that within the last 2 decades, correct...

Well, except with all this panic, the Yen is gaining against the USD, i.e. the "sale" is less good these last few days. Not sure why, maybe it's because people are dumping USD, and buying Yen as a safe-haven currency?

deleted 2y ago
[deleted]
bryceneal 2y ago
The consensus seems to be that the gain is caused by the Bank of Japan raising rates on July 31, hinting at more raises. Yen has had historically low near-zero rates, so this raise strengthened their dollar. On top of that, many traders were involved in a "Yen Carry Trade". Meaning they were borrowing Yen (because of the near-zero rates which beat out the 5% USD rates) and were using it to trade equities, crypto, whatever. When the Yen started gaining against the dollar, these traders were actually losing money (since they were short Yen due to their Yen-denominated debt). This caused an unwind, meaning the traders wanted to close their positions (sell their equities, crypto, whatever) and buy back Yen to repay their debt, which pushed the Yen up further.
- worldvoyageur 2y ago
  That, plus the trade was highly leveraged, so when yen rates went up the traders were asked to provide more margin. To meet the extra margin required they needed to unwind at least some of their position.
- arpinum 2y ago
  The exchange rate story doesn't sit well with me, wouldn't you simply hedge the fx risk?
shusaku 2y ago
My impression from these past few days has been that the US will also cut the rate soon, so you’ve got convergence from both directions.

nabla9 2y ago

The exact opposite is true. The sale was triggered partly because Japanese yen strengthened significantly. It's now more expensive to visit Japan.

SapporoChris 2y ago
Yes, yen is stronger versus the US dollar. However, the rates are still very good, especially when viewed over the past ten years. https://www.xe.com/currencycharts/?from=USD&to=JPY&view=10Y https://www.xe.com/currencycharts/?from=USD&to=JPY&view=10Y
- satvikpendem 2y ago
  Yes, in fact I am in Sapporo right now, SapporoChris. I was earlier in Okinawa when the rates were still 160 yen to the dollar, but the current conversion is not bad either.
acchow 2y ago
Still much cheaper than 5 years ago

bottled_poe 2y ago

It’s so funny to me how confidently incorrect this comment is.

nemo44x 2y ago
It’s not entirely wrong even though there has been a 12% change the last month or so. The Yen is still historically cheap VS USD. Last time I was there you got like 110¥ for 1$. It’s around 140¥ today. But yeah, going there a few months ago would have been better.
- adrian_b 2y ago
  When I was there in May, it was well over 150 yen per dollar. However, even with 140 yen per dollar the prices would be quite good.
puzzlingcaptcha 2y ago
Yen is still cheaper than at any point in the last year.
xenospn 2y ago
And yet you’ve somehow managed to create a reply that’s even worse.

IG_Semmelweiss 2y ago

Vs 3-9 months ago, incorrect. Vs anytime previous to that within the last 2 decades, correct...