The speculation in U.S. dollars which may lead to a re-valuation upwards of the West?
GV Tokyo Stock Exchange
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Background: The speculation in U.S. dollars which may lead to a re-valuation upwards of the West German Deutschmark is being repeated in Japan.
In Tokyo the speculation is against the revaluation of another strong currency, the Yen. There has been heavy selling of American dollars in the local foreign exchange market, the hectic buying of shares offering a hedge against inflation - such as real estate.
The Bank of Japan has been doing its best to support the U.S. dollars. In the space of an hour on Thursday it was reported as buying 250-million dollars in a hectic rescue operation.
For years there has been international criticism that the Japanese Yen is undervalued, and gives Japanese industry an unfair advantage in overseas markets. But the Government has pledged that it will not re-value, at least not in 1971.
The present monetary crisis might well bring a change in attitude however. If the German mark is re-valued, the Japanese will be under considerable international pressure to follow suit. (Our recent Production 4183/71 on the opening of the Tokyo Trade Fair gives more detail on the Japanese economic situation.)