Global Economist, Worldwide Speaker, and Author - www.PaulFDavis.com
The Japanese Yen is strong as a sumo wrestler as global markets tank during the financial crisis. Japanese Yen becomes global investors safe haven and place of refuge as traders pull out of the U.S., Europe, and Asia to buy back Japanese Yen. Right behind gold, the Japanese Yen is looking very solid and safe.
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Europeans are dumping the Euro and running to the Japanese Yen, which is soaring to all-time highs thanks to Japan's budget surplus and strong national savings. In a time of global economic uncertainty, it helps to be a lender nation rather than a borrowing one like America which has a $10 trillion deficit.
Global investors know the U.S. Treasury can only print dollars for so long before the greenback itself becomes worthless due to the excess supply and futile attempts of the Federal Reserve to pay American global indebtedness to nations such as China and Japan. Hence the high dollar will be short lived and everyone knows it.
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The Japanese Yen is at 13-year highs and getting the attention of G7 finance ministers, giving Japan great leverage and negotiating power in the world economy.
The yen recently hit a rate of 91.93 yen against the dollar, its highest level since 1995.
Tighter monetary controls and regulations in the United States and Europe to account for past greed and excess, will further increase the level of attractiveness to global investors looking to the Japanese Yen as a safe haven.
Japan's Finance Minister Shoichi Nakagawa is continuing to watch currency markets with great interes as Japan become's a dominant global player in currency.
Like the US dollar used to be, the Japanse Yen is seen throughout the world as a safe haven for investors in uncertain times.
On the short-term the U.S. dollar is also doing good, but likely to fall hard again against the Euro once American media hype dies down the the credit crunch tightens. Yet investors looking for safety are finding gold and the Japanese Yen to be very comforting in these uncertain economic times.
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