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Jon Taylor
Joined: 09 Mar 2005
Posts: 238
Location: Tokyo
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 Posted: Mon Dec 11, 2006 6:30 am Post subject: English pound - Japanese Yen |
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A question for you budding economists....
2 years ago the exchange rate was 190 Yen to the English pound.
1 year ago the rate was 205 to the pound.
It's currently 230 to the pound.
Hence, my wage has dropped around 20%.
Would any of you know why this rate continues to drop ?
What economic reason is doing this....?
I am of the opinion that it's beacuse the pound is strong but others say it's the Yen that is weak....... |
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cornishmuppet
Joined: 27 Mar 2004
Posts: 642
Location: Nagano, Japan
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| Posted: Mon Dec 11, 2006 8:53 am Post subject: |
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| The exchange rate really sucks right now. I've actually been so sad as to get the figure each day off xe.com and put them on to a speadsheet to see which way its going. Not good so far, though. |
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Hoser
Joined: 19 Mar 2005
Posts: 694
Location: Toronto, Canada
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| Posted: Mon Dec 11, 2006 2:12 pm Post subject: |
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| I'm no economist but I suspect the reason is partly due to the yen and partly due to the pound. I found that the yen decreased in value about the same time that China revalued the yuan. That combined with some strong economic factors coming from Britain ( Ihave no idea what those might be) have combined to make you screwed. |
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markle
Joined: 17 Jan 2003
Posts: 1316
Location: Out of Japan
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| Posted: Mon Dec 11, 2006 2:24 pm Post subject: Re: English pound - Japanese Yen |
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| Jon Taylor wrote: |
Hence, my wage has dropped around 20%.
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Only in relation to to the pound, if you value your salary based on what it is worth back home both good or bad then you might as well get a salary back at home.
Of course there is the possibility that your original salary was 20% over valued in the first place. |
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Gordon
Joined: 28 Jan 2003
Posts: 5309
Location: Japan
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| Posted: Tue Dec 12, 2006 12:17 am Post subject: Re: English pound - Japanese Yen |
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| markle wrote: |
| Jon Taylor wrote: |
Hence, my wage has dropped around 20%.
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Only in relation to to the pound, if you value your salary based on what it is worth back home both good or bad then you might as well get a salary back at home.
Of course there is the possibility that your original salary was 20% over valued in the first place. |
Actually, your savings have dropped by 20%. Your salary is still the same.
Many people understand as the Cdn dollar has done about the same since I have been here. It was 76 and now it is at 103, so that is about a 30% drop in 4.5 years. I feel your pain. |
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ironopolis
Joined: 01 Apr 2004
Posts: 379
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| Posted: Tue Dec 12, 2006 12:24 am Post subject: Re: English pound - Japanese Yen |
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| Jon Taylor wrote: |
I am of the opinion that it's beacuse the pound is strong but others say it's the Yen that is weak....... |
A bit of both, I think, but maybe more the yen's weakness. The yen has nosedived against lots of other currencies, not just the pound. I do quite a few transactions in Korea and whereas it used to be an easy to calculate 10won to 1 yen, it's recently gone under 8 won to 1 yen - also a 20% loss.
The yen has also gone down dramatically against the euro. I notice someone also mentioned the C$ above and I've heard Aussie friends tell the same sorry tale.
If you have to or intend to use the yen you earn here back in the UK, then yes, it is pretty bad news. I guess one way to offset the disadvantage a little (but only a little  )is to buy as many things as realistically possible here in Japan that you might have otherwise bought in the UK.
In the late 90s, it was very much the opposite for Brits - and I suspect other nationalities too - as there was a time when it was around 150 yen to the pound. I doubt that will ever return though. |
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Gordon
Joined: 28 Jan 2003
Posts: 5309
Location: Japan
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| Posted: Tue Dec 12, 2006 12:29 am Post subject: |
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| There is no question the J government is intentionally trying to devalue the yen in order to help its exports. Many governments have complained about this, but not much you can do about it especially as so many countries depend on J exports and have a trade imbalance with Japan |
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markle
Joined: 17 Jan 2003
Posts: 1316
Location: Out of Japan
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| Posted: Tue Dec 12, 2006 12:39 am Post subject: |
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| Yep Gordon and they are probably doing this to stay competitive with the Chinese who are keeping the yuan undervalued. |
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moot point
Joined: 22 Feb 2005
Posts: 441
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| Posted: Tue Dec 12, 2006 1:37 am Post subject: |
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Two major factors, I think:
1) difference in interest rates. Japanese keeping a .25% interest rate makes the currency less attractive for those in the money market.
2) strong oil prices. A lot of these companies are based in the UK so you've seen the pound strenghening with oil prices (This is similar in Canada and Aust. but is more a reflection of the increase in price of metals).
A lesser factor is that the yen is still tied to the U.S. As U.S. dollar has been weakening against other majors, then yen has followed. |
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