# Changing Yen Rate



## jessicalees (Oct 12, 2014)

I am leaving Japan in February and would like some advice about the yen exchange. 

I was advised that the yen typically gets stronger after January against the dollar. This was told to me by someone who had been living here for about 8 years. 

I was wondering if anyone knows what is anticipated of the yen in the next coming months. I know if is a high exchange right now because of the snap election. Is there any speculation it will fall back to around 110 after the new year? 

I just don't know if I should change money now or wait to see if it gets stronger or not. It is really making me nervous. 

Thanks for the advice.


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## larabell (Sep 10, 2007)

If anyone really knew the answer to that, they'd make a bloody fortune. Back when it was around 80 or 90 I used to say we'd see 50 before we see 150 but it's likely I may be wrong on that. So take my wild guess with a huge shaker of salt.

The yen is weak right now because the economy is tanking, thanks in part to Abe's consumption tax increase. He's just dissolved the lower house at a time when the opposition doesn't seem to have their act together and, while you may or may not like his policies, you gotta admit he's no dummy when it comes to playing politics. If the LDP strengthens (or even retains) their majority in this upcoming election, it's probably a sure bet that the next consumption tax hike will go through and the economy will get another blow to the groin. So right now I'd bet on seeing 150 before we see 50 but that's a long-term prediction and in the short term you're at the mercy of speculators. If I were in your position, I'd probably wait. The recent huge (and sudden) move in the exchange rate is begging for a short-term correction, even if the long term calls for an even weaker yen. On the other hand, you only have a couple months and sometimes significant exchange rate moves take a lot longer than that to play out. If the yen starts to recover before the election, dump it while you have the chance.

And, for what it's worth, I'm not in finance nor do I speculate in currency so this is just a hunch. Another arrow for your quiver, so to speak .


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## jessicalees (Oct 12, 2014)

I appreciate your advice. I thought the consumption tax increase wasn't likely now, so we will see what happens. I have read that the yen is weakening too fast. I should have changed it when it went back to 106 in October. It has all just happened so suddenly. 
Thanks again. We will see what happens!


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## BBCWatcher (Dec 28, 2012)

larabell said:


> The yen is weak right now because the economy is tanking, thanks in part to Abe's consumption tax increase.


It wasn't his tax increase. It was Prime Minister Yoshihiko Noda's. The law that introduced the two tax hikes (to 8% in April, 2014, then to 10% in October, 2015) was passed in mid-2012 during Noda's government. Prime Minister Abe didn't act to stop the increase to 8%, but he's now at least postponed the further increase to 10%.

An even better idea would be for the Prime Minister to champion a law to abolish the consumption tax for a minimum of 5 years, and then only reintroduce the tax in small 2 percentage point increments up to 10% if, per increment, Japan's GDP has grown for, say, 4 consecutive quarters with at least 2.5% growth.


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