France24.com: How do you explain the surge in the yen against the dollar?
Danielle Schweissgut: The markets anticipate that the Japanese will repatriate some of their money. These are mainly insurance companies, which will have enormous needs. These companies have placed their currencies around the world and will have to convert them into yen, which will increase demand and thus raising the price of local currency.
F24: The government has denounced speculation ...
DS: Yes, because for now, insurance companies are still assessing the cost of this disaster and have not begun to repatriate that money.So these are speculators who plan what will happen to buy yen in dollars, therefore raising the price of the Japanese currency against the greenback.
F24: Can we expect the yen continues to rise?
DS: That's entirely possible. When everyone has an update on the money to pay insurers and organize the reconstruction, the actual movement of money will start, thus putting further pressure on the yen.
F24: Who suffers the most from this surge in the yen?
DS: This is in theory a bad news for Japanese companies whose business is export oriented. The yen is more expensive, more products would be difficult to sell abroad.In practice, Japanese companies should get out. Indeed, the soaring yen is not new: the course had already appreciated the yen against the dollar last year, and a similar phenomenon occurred after the Kobe earthquake in 1995. These firms have adapted by investing heavily in innovation and positioning themselves in niche markets - where there is little competition, which reduces the importance of the yen.
F24: What can the authorities to counter this surge?
DS: The levers are now in the hands of the Central Bank, which can handle them in two ways. First, it can flood the market by issuing yen, which should lower the value of money.That's what she started, but for now, this has not prevented speculation. The other lever, the central bank could now operate, is to directly intervene by selling yen and buying, as any player in the market in order to counterbalance the speculation.
