>On Thu, 23 Sep 1999, J. Barkley Rosser, Jr. wrote:
>
> > As a followup to a rather long message on this
> > I just sent: Japan "owned our sorry asses" last
> > year, but the yen was falling then. Why?
>
>You said it yourself: irrational short-term speculation. Markets are by no
>means the streamlined monuments to curvilinear perfection the neolibs and
>squawk hawks lining CNBC make it out to be. They bounce around all the
>time, just like capitalist society itself: constantly in motion. But
>there are indeed long-term trends in the churn.
>
>Plus, Japan's economy was still shrinking last year, and has stabilized
>this year.
According to the September ish of International Financial Statistics, here are Japan's recent balances on its financial account (movement of direct, portfolio, and bank capital). and the yen/dollar exchange rate. A negative number is a net outflow, and a positive one a net inflow:
K flow yen/$ 1992 $-100.28 billion 126.65 1993 -102.21 111.20 1994 - 85.11 102.21 1995 - 63.98 94.06 1996 - 28.10 100.78 1997 -118.05 120.99 1998 -116.76 130.91 1999Q1 + .61 116.54
So the appreciation of the yen between 1992 and 1995/6, and its depreciation from 1996-98, parallels the movement in capital flows. And the recent appreciation has come with a reversal from a net outflow to a net inflow in the first quarter of 1999. Given the yen's recent strength, it's a reasonable bet that the Q2 and Q3 figures are even more strongly positive.
Doug