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Steve Chiotakis: The Japanese yen today fell to a three-month low against the dollar. Last fall, currency traders piled into the yen, treating it like a shelter amid a global storm. Turns out the shelter’s leaking. From Shanghai, here’s Marketplace’s Scott Tong.
Scott Tong: Pick a chart, any chart, about Japan’s economy, and chances are it’s an upside-down hockey stick, far worse than the U.S. Japan’s GDP shrank 12 percent last quarter. Exports last year nose-dived 46 percent.
Patrick Bennett at Societe Generale says currency investors are spooked because of the health of Japan Inc. — companies like Toyota, Sony, Panasonic.
Patrick Bennett: They tend to be exporters of big-ticket items. Cars, flat-screen panel TVs, that have been exported to developed markets and have tended to be bought on credit. So with the situation in the global economy being as it has, Japanese exporters have suffered tremendously.
Most of the yen sellers are the Japanese themselves. They’ve decided to take their strong currency overseas and spend it; or they’ve simply lost faith in their economy.
Today, Standard and Poor’s portrayed Japan’s picture as . . . well, substandard and poor. The report thinks the country’s headed for its worst recession since World War II.
In Shanghai, I’m Scott Tong for Marketplace.