FT News Briefing The murky moves behind the yen
May 3, 2024
Apple faces a 4% revenue drop, largely due to declining sales in China. Meanwhile, Japan's aggressive $35 billion intervention aims to stabilize the yen, which recently plummeted to a 34-year low against the dollar. The discussion also touches on the ex-boss of a major US shale oil producer accused of colluding with OPEC. Lastly, while Europe has temporarily solved its Russian gas supply woes, concerns about long-term energy strategies and the challenges of transitioning to renewable sources loom large.
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Yen Intervention Tactics and Effectiveness
- Japan intervened to support the yen but didn't announce it to catch speculators off guard.
- The intervention's effect was short-lived as the yen fell again due to fundamental economic factors.
Balancing Act: Yen, Households, and Businesses
- A weak yen benefits Japanese companies but hurts households due to import costs.
- The Japanese government balances these competing interests by managing inflation and currency rates.
EU Energy Crisis Averted, But at What Cost?
- Europe avoided an energy crisis after Russia's invasion of Ukraine by diversifying gas supplies and implementing a price cap.
- These short-term solutions created long-term issues, including dependence on LNG and higher energy costs.