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Yen Weakens As Energy Fallout Hits Currencies
Since September 21st, the Japanese yen (JPY) has weakened sharply against the U.S. dollar (USD). A 200%+ rise in Asian coal and natural gas prices may be part of the reason for the fall (Figure 1). Japan imports 100% of its coal and 98% of its crude oil and natural gas. Together, these three fossil fuels generate 76% of Japan’s electricity. As such, rising energy costs impact two of the four macroeconomic forces that influence exchange rates: trade balances and the relative pace of economic growth. chart In addition to trade balances and economic growth differentials, there are two other macroeconomic forces -- ... (full story)
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