Japanese Yen May Rise as CLO Market Faces Credit Downgrades

Will the US dollar continue to decline against the Japanese Yen? The currency markets are highly speculative but those who understand currency trends are aware that they are subject to dramatic changes in short periods of time.

As the US economy continues to stumble downward, the Yen has become increasingly attractive as a trade partner for many countries and corporations around the world.

It’s not hard to see why Japanese consumers have been buying more goods from American companies and corporations. The dollar is weaker against all other major currencies but it remains strong against the Japanese Yen. In fact, recently, the Japanese government announced that it was reversing an earlier decision to devalue the Japanese Yen.

Other nations may follow suit and devalue their currencies or may even join the “WTO” club. Japan has a very complicated relationship with the United States government. It’s no wonder that they would prefer to keep the value of their currency at a high level as they feel this allows them to preserve their independence.

High-yield government bonds are one of the reasons that the yen has remained strong. These bonds are issued by a variety of governmental institutions. This makes them easier to buy as they can be backed by government bond purchases. Having a government bond issued by the United States makes them a much more attractive investment.

A strong US dollar also helps Japanese consumers and businesses who rely on their exports to receive a competitive price. While the dollar may be rising against the Japanese Yen, it is still worth more than the Euro or the British Pound. This provides Japanese exporters and corporations with an edge over European or other suppliers.

Unfortunately, high-yield bond issues tend to get easily out of hand. When you see banks putting up hundreds of millions of dollars on bonds, you know there’s trouble brewing. In this case, financial issues at some of the major banks are certainly to blame.

It is difficult to ascertain when the situation will become worse as the damage wrought by Hurricane Andrew continues to pile up on the citizens of Florida and the Keys. There are some speculators who think that Japan may devalue its currency before the end of the year. The rumor is that this may cause problems for the United States and the European Union.

One thing is for sure: there is a lot of politics behind the scenes when it comes to the changing values of the Japanese Yen. While the dollar may be weakening against all other major currencies, some countries like Russia have threatened to follow suit. The consequences of this could include a devastating war.

In Europe, banks are facing a huge debt burden that some might call “indecent debt”plunder.” These banks may indeed suffer catastrophic losses on this kind of debt. This is exactly why they are being threatened with lawsuits.

International terrorist groups like Al Qaeda and Hezbollah are also taking credit for attacks they are not responsible for. In recent years, both groups have carried out bombings in Europe and in areas where there are large numbers of Western multinational corporations. In one of these recent attacks, the death toll was up to several hundred.

They gained the extra funds they needed by offering someone a job. It’s doubtful that the families of these victims felt a small part of the guilt. These financial companies need to be reined in and the criminals who carried out these attacks should be punished severely.

It doesn’t matter how the political winds are blowing. What matters is whether they will stay low enough to allow for any kind of stability. In this case, a weak dollar is providing much needed liquidity to those who wish to sell yen.