“Japan doesn’t need a stronger yen. Japan needs deregulation of its labor and capital market, privatization of state-owned industries, and a more pragmatic, progrowth domestic industrial policy focused on excising vested interests and the rigidities of domestic service industries. The promotion of growth and entrepreneurship is the only way to generate the kind ofemployment that the DPJ promised on the campaign trail. Unfortunately, this kind of policy path is particularly difficult for Mr. Hatoyama’s government, which is heavily reliant on labor unions for political support.”
FX Trading – Friday Ramble
I noticed a Reuter’s poll today. All the top banks were asked to provide their guess on just how undervalued the Chinese currency—yuan- was against the US dollar. The averageguesstimate was about 20%. That’s about 20% lower than my guess would have been, but no matter. What was interesting was their guess about when the Chinese currency would actually become convertible.
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