Word: sasaki
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Dates: during 2000-2009
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...Still, it's unclear whether intervention will be necessary. Some argue that the dollar-yen exchange rate is reaching a sustainable equilibrium and that the yen isn't as strong as it appears. "The yen's level until last year was abnormally weak," says Tohru Sasaki, chief currency strategist in Tokyo at JPMorgan Chase & Co. "Now it's coming back to normal...
...Sasaki attributes the yen's recent strength to the unwinding of the yen carry trade, referring to the widespread practice by investors over the past several years of borrowing yen at a low interest rate and investing the funds in currencies paying higher interest rates. That was an easy way to make money until central bankers in the U.S. and other countries began slashing borrowing costs as the credit crunch hit and their economies faltered. The carry trade "is a very strong and powerful movement, and it's difficult to stop it," Sasaki says. "I think that Japanese officials understand...
...Sasaki argues that, compared with a period in the mid-1990s when the yen hit a postwar peak against the dollar, today's negative impact on the Japanese economy is "not that large." That's because the U.S. over the past decade has seen higher inflation than Japan, where prices have been relatively flat for many years. To have the same effect as the peak in 1995 - when the exchange rate reached 79.75 yen to the dollar - Japan's currency would have to soar to 48 to the dollar, he says. "If we think about the inflation-rate differentials...
...company betting on a yen reversal may have a long wait. Tohru Sasaki, chief currency strategist in Tokyo at JPMorgan Chase & Co., believes the dollar-yen exchange is reaching a sustainable average. "The yen's level until last year was abnormally weak. Now it's coming back to normal," he says. Compared to the mid-1990s, he says, the strong yen's negative impact on the Japanese economy is "not that large." To have the same effect as the postwar peak in 1995, the exchange rate would have to reach 48 yen to the dollar, he says, because...
...dollar within three months and to 83 over the next year. Intervention, he says, will come at the 85-level, but even then it is difficult to predict what will happen. "What we're seeing is the unwinding of the yen carry trade," says JPMorgan Chase's Sasaki, referring to the practice of buying low-interest yen and investing it in high-yield currencies. "It's a very strong and powerful movement and it's difficult to stop it. I think that Japanese officials understand that and that's why they haven't intervened...