Japan New Minister

Japan has appointed a new Prime Minister, the sixth in five years. Already, the former finance minister, Yoshihiko Noda, could formally get the job. The challenges are enormous and Noda faces include primarily the help Japan recover from devastating natural disasters related to nuclear power. The problem is that in Japan there is no leadership, no consistency to follow. According to the final solution could be Noda.

The most important issues are the recovery from the tsunami and a too strong yen, which affects the power of the nation and the strength of the Nipponese companies. The politicians up to now have not been able to show any clear direction on what to take in the coming months on. For Japan is at stake in these days could not be higher.

Almost six months after the tsunami that devastated the country, the government has yet to begin rebuilding in earnest and continues to leak radiation. The opposition strategy is to tie the legislation, Japan is in a political deadlock that discredits the government. Noda for his part promised to work with the opposition.

Another serious problem is the yen, as strong as ever in recent decades, which is damaging the competitiveness of exports. Noda is the finance minister, knows everything about the situation of the Japanese currency, then the markets would be likely to welcome his election. Luna fundamental part of the work of Noda will be to raise taxes to finance reconstruction after the tsunami. Obviously this will not improve the economy of Japan, but for many it is essential.

Noda will replace the former Prime Minister Naoto Kan, even after 15 months in office, which has been criticized for his handling of the disaster of March. We'll see what happens.

Read more »

Bernanke's speech in Jackson Hole

Those whose expectations were low relative to the speech by Federal Reserve chairman, Ben Bernanke, held in Jackson Hole, were not disappointed. Those who sought a recovery in the words of Bernanke are disappointed, as when the same Fed chairman last year has provided the basis for further purchases by the Fed, what became the QE2, which led to 600 billion dollars purchases of Treasury securities.

This year, the Fed chief said in essence that the temporary problems are less to blame than previously thought. The structural problems, particularly in the area of housing, preventing monetary policy to have its usual effect on the economy.

Bernanke mentioned the word "tax" 15 times as much "money". The Fed chief said that most of the economic policies that sustain robust economic growth in the long run are beyond the powers of the central bank. But the Fed chief did not specify other economic initiatives, which should be revealed next month. The proposals could include a cut in taxes and spending for public works.

Meanwhile, the FOMC will consider all options available to him in a meeting of the expanded two-day, on 20 and 21 September in order to give full practical implementation issues still outstanding.

In reality there is much to talk about, including the idea of a lengthening of maturities of the securities portfolio of the Fed, in an attempt to bring down interest rates in the long term. What the Fed is planning to do does not depend on the length of the next FOMC meeting, but the current economy. Bernanke admitted that growth has remained significantly behind the expectations that the Fed did itself.

Read more »

Summary currencies

We see in what way the currencies most famous and known market have moved in the week just ended. Among the events of a fundamental nature that we must consider is Bernanke's speech in Jackson Hill, held yesterday, when the Fed chairman, as usual every year, highlights the situation of markets and transactions that the central bank the United States can accomplish in the coming months to help the market recover.

The currency pair euro / dollar moved in a rather side with a high volatility. Next week we might consider opening a position in favor of the euro, since the situation is critical in the U.S. and the Fed, it is understood, does not know how to move without "hurting" or preventing the transactions carried can help one side and other damage.

The pound has rather lost ground steadily against the U.S. dollar, for the next week we could instead think of a trend in favor of the British currency. Aware of the strong resistance level at 1.6600 share, to consider if this currency pair should arrive in the vicinity of the value.

The exchange rate between U.S. dollar and Japanese yen has seen a move sideways until mid-week, then a peak in favor of the dollar recedes completely yesterday. For the next week of trading could still expect a trend in favor of the yen, but we await confirmation before entering the market.

The euro has gained much ground against the British pound, reaching almost a height of 0.8900, a value that could be broken during the next week. We'll see the economic news arriving from Europe and how the euro area will be able to handle the economic crisis that is gripping.

Read more »